The RBA had little choice but to deliver a rate rise on Tuesday. But four forces, led by housing and immigration, will keep working against Michele Bullock.
Michele Bullock’s first rate rise as Reserve Bank governor was always the biggest certainty of Melbourne Cup day,Having said last month that the bank’s board had “a low tolerance for a slower return of inflation to target than currently expected”, Bullock and the bank board had little choice but to act when the inflation data for theAs Bullock noted in her statement on Tuesday, after lifting the base rate by 0.25 per cent to 4.
As she noted in her statement on Tuesday, shockingly poor investment in new dwelling threatened to weigh on already slowing economic growth. And federal and state governments are further crowding out housing investment – and putting upwards pressure on prices for labour and materials – by unleashing a wave of infrastructure spending at what is arguably the wrong time.“Both state and federal Governments are doing little to reign in demand,” Bassanesse notes.
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