business
RBA lifts cash rate to 4.85 per cent and revises growth and inflation forecasts
RBA lifts cash rate to 4.85 per cent, an 18-year high, and revises growth and inflation forecasts.
Key points
- The cash rate rise to 4.85 per cent is an 18-year high for the Reserve Bank of Australia.
- The bank's 75-page quarterly Statement on Monetary Policy contains its revised figures.
- Governor Michele Bullock says people will feel it is a recession because they feel poorer.
Why it matters. Bullock's comments suggest households may feel worse off, even though the bank is not forecasting a technical recession for the overall economy.
The Reserve Bank of Australia lifted its cash rate to 4.85 per cent, an 18-year high, and set out its revised figures in a 75-page quarterly Statement on Monetary Policy. Governor Michele Bullock said people will feel it is a recession because they feel poorer, even though the bank is not forecasting a technical recession for the overall economy. The statement's numbers, which the article describes as ugly, expose how fragile the economy is.
Latest updates
RBA lifts cash rate to 4.85 per cent and revises growth and inflation forecasts
The Reserve Bank of Australia has raised its cash rate to 4.85 per cent, the highest level in 18 years. Its quarterly Statement on Monetary Policy revises forecasts for economic growth, inflation and unemployment. Governor Michele Bullock acknowledged the rate rise would make people feel as though the economy is in recession because they feel poorer. The 75-page statement is the central bank's detailed assessment of the economy. The reporting describes the outlook as fragile, though it does not give the full revised figures in the available text.
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Markets Expect RBA to Lift Cash Rate to 4.85% on Tuesday Amid Recession Fears
Markets and most economists expect the Reserve Bank of Australia to lift the official interest rate to 4.85 per cent on Tuesday afternoon. Some commentators have warned the increase could drive Australia into recession. They argue it could leave tens of thousands of people out of work. The warnings add pressure on Treasurer Jim Chalmers to cut deeper into government spending. The RBA's decision will be closely watched for its effect on household budgets and the broader economy.
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