The RBA is expected to raise rates by 50 basis points on Tuesday, piling more pressure onto household budgets.
Household budgets are set to take another hit when the Reserve Bank meets on Tuesday, with markets tipping the central bank will raise rates by another half a percentage point in its fight against soaring inflation.
RBA governor Philip Lowe will deliver his annual Anika Foundation address on Thursday, titled Inflation and the Monetary Policy Framework, which Mr Plank said could contain information about the central bank’s appetite to continue raising rates in 50 basis point increments. Westpac chief economist Bill Evans said a 50 basis point increase on Tuesday would take the cash rate into the “neutral zone”, where monetary policy is neither contractionary nor expansionary.Economists expect the June-quarter national accounts, due Wednesday, to show the economy expanded by 1 per cent in the quarter, taking the rate of annual growth to 3.6 per cent.
“In the June quarter, households spent more freely on services, notably hospitality and travel. Domestic travel surged in April, with Easter and school holidays, and we have lift off on overseas travel with the reopening of the national border,” he said.
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