The RBA will be forced to consider an election campaign rate hike for the first time in almost 15 years after inflation surged to its highest level since 2001.
The Reserve Bank of Australia will next week be forced to consider an election campaign rate hike for the first time in almost 15 years after inflation surged to a stronger than expected 5.1 per cent, the highest level since 2001.
The Coalition criticised the RBA’s decision to hikes rate during the 2007 election, but when asked byabout the prospect of a mid-campaign hike on Wednesday, Prime Minister Scott Morrison gave the bank board political cover to act if it thinks necessary. That would add about $100 a fortnight to the repayments on a $750,000 standard variable rate mortgage loan.
CPI lifted 2.1 per cent on a quarterly basis, also well ahead of expectations. Trimmed mean inflation, which strips away large price movements, rose 1.4 per cent and, on an annual level, is at the highest growth rate since 2009. Campaigning in the north Queensland seat of Capricornia before the data was released, Mr Morrison showed-off a bar-graph to compare Australia’s headline CPI inflation rate to other developed nations.“Australia [is] performing better than all of them when it comes to cost of living pressures,” he said, although the actual result came out well ahead of the graph shown by the prime minister.
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