Inflation has been exacerbated by a budget that is pumping tens of billions of deficit spending into a low unemployment economy.
According to Scott Morrison and Josh Frydenberg, yesterday’s interest rate hike has nothing to do with them. This is exactly what should be expected because they have handled the pandemic so brilliantly and if rates are rising sooner than expected, it is because of international inflationary pressures.
Nothing to see here, they don’t hold a tube, etc, etc.
True, interest rates would not have stayed at 0.1%. Perhaps they would never have stayed there until 2024, although under the Reserve Bank’s now-abandoned “wages first” policy, we could have waited until 2030 for wages growth of more than 3%.
Read more about how government fiscal policy is adding fuel to the fire.
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