Australia’s inflation problem has little to do with the spending habits of home owners, because the major drivers right now are things like petrol, rent and the cost of building houses.
So why are borrowers being punished with another hike in rates?
The Reserve Bank of Australia board has decided the official cash rate target should rise a quarter of a percentage point to 4.35 per cent.
It’s the 13th rate rise in 19 months, putting the cash rate at its highest level in 12 years.
In this episode, the ABC’s senior digital business reporter, Michael Janda, discusses the limits of the RBA’s “blunt tool”.
He looks at the subtleties in the latest statement from the Reserve Bank and what it indicates about when interest rates might start to fall.
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