Reserve Bank of Australia to Set Interest Rates
The Reserve Bank of Australia will meet today to determine the future of Australian interest rates.
Australian economists have advocated for higher interest rates amid record inflation, though given the upcoming election, there is concern within both the Liberal and Labor parties that an interest hike could affect both their chances at taking power. The governing Liberal coalition fear that voters may take out their frustrations through their voting, but the Liberals also retain some hope that they may be able to spin interest rate hikes as strong leadership. The Labor Party remains vulnerable on economic policy and an interest rate hike risks painting the party as struggling to maintain a firm grip on the economy.
Expect that the Reserve Bank to increase interest rates after today’s meeting—in line with the trend among other developed economies—to curb the current rate of inflation. This would be the first time in over a decade that rates would be increased immediately before an election, potentially affecting its outcome even though the bank operates independently of the federal government. Further, expect that this increase to re-introduce debate around cost of living in the campaign rhetoric of both parties, just three weeks before polls open.
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