Reserve Bank
Update 3pm: The RBA surprised everyone and left interest rates on hold today.
In recent years a horrendous new phrase has appeared to describe people struggling to make ends meet. They’re suffering from “mortgage stress.”
This week it was reported almost half of the young people who availed of the Rudd Government’s increased help for first-home buyers were suffering from this terrible condition. If true life will get a whole lot more stressful for them over the coming months as interest rates return to normal, starting most likely with a Reserve Bank announcement this afternoon.
Where did this “mortgage stress” phrase come from, anyway? It sounds like some kind of psychological disease that should be covered by Medicare. As far as I can tell what it actually means is you have borrowed too much money.
Continue reading "Are your stress levels going up with interest rates?" »
UPDATE: As of 5pm all four banks have already passed on the interest rate increase.
For the second time in as many years, the Reserve Bank has helped cement the banking community’s reputation as a cuddly bunch of warm-hearted funsters by using Melbourne Cup Day to stick it to home-owners.
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While you were munching on some prawns the RBA increased rates from 3.25 per cent to 3.5 per cent, resisting the temptation to go for a much more dramatic and painful 0.5 per cent rise, but still sticking by its warning that there would be more more pain to come.
Many people with mortgages will shrug this one off – we’re still about $700 a month better off in terms of repayments than we were when the GFC hit.
Continue reading "Kevin Rudd does not want to own these rate increases" »
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Louise says:
Andrew, the partisan, take your corner, fight! approach to these issues can be quite entertaining, but I was talking about the way govt and consumer behaviour interact from an economic point of view. If you agree with Swan that the private sector is in retreat, then the only source of… Read more »
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Joel B1 says:
Who said “Its great illusion was its belief in the limitless possibilities of compromise”? It could have been about Rudd… Read more »
Update 2.35pm: The RBA has just announced it has raised the official cash rate by 0.25 a per centage point to 3.25 per cent.
The Rudd Government is yet to make a hard decision. But this won’t stop them leaving the heavy lifting to someone else - namely Glenn Stevens at the Reserve Bank.
Whether the RBA decides to lift interest rates today or on Melbourne Cup day, this will be a hard decision. It will mean increased pressure on family budgets and small business.
For the more than 200,000 Australians who have bought their first home recently, it will their first Rudd rate rise, with more to follow.
Continue reading "We don’t want to join the high interest rates club" »
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Graeme Stedman says:
When a Government spends recklessly without any thought for the future people deserve what they voted for. Bring on high interest rates the Labor voters loose there houses creating opportunties for richer investors. This Federal Government will lead to the biggest transfer of wealth from the poor to the rich.… Read more »
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Greg Atkinson says:
I think the Opposition have got themselves in a tangle on interest rates. When they were in power their line was that the RBA was independent and we could not blame the Government when rates went higher because it was due to a strong economy blah blah….... Now they seem… Read more »
Last Friday I continued a tradition of my predecessor in Cook, Bruce Baird, by catching up with one of our more prominent Shire constituents at Tatterstalls Club in Sydney.
The occasion was a public hearing of the House of Representatives Standing Committee on Economics, which Bruce used to chair. The constituent was none other than Reserve Bank Governor Glenn Stevens. The Shire conspiracy over economic management in Australia continues!
As usual, reports of the proceedings narrowed in on the key question of where rates are headed. Sadly, the answer is up, by as much as 2%. This was not a major revelation as the Governor had already flagged this view in the Bank’s August monetary policy statement.
Continue reading "When rates go up again, who will Rudd blame then?" »
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Peter Robin says:
“Hora novissima; tempora pessima sunt: vigilemus” ‘Times are bad, things are grim, watch out - St Bernard of Cluny 1140AD There is a ‘shitstorm’ coming and it will start in America when the hidden agenda of the liberal left, the moderates multiculturalists and the P.C. brigade hits the soft socialists… Read more »
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iansand says:
The reason the Reserve had the option to cut rates so deeply was because, by international standards, the rates that Mr Costello left us with were so high. So Liberal high interest rates are good but Labor high interest rates are bad? It is no wonder my brain hurts. Read more »
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