AGL 8.30 Decreased By ▼ -0.03 (-0.36%)
ANL 10.95 Increased By ▲ 0.25 (2.34%)
AVN 79.70 Increased By ▲ 1.51 (1.93%)
BOP 5.75 Increased By ▲ 0.18 (3.23%)
CNERGY 5.64 Increased By ▲ 0.26 (4.83%)
EFERT 79.36 Increased By ▲ 0.71 (0.9%)
EPCL 67.48 Decreased By ▼ -0.31 (-0.46%)
FCCL 14.89 Increased By ▲ 0.39 (2.69%)
FFL 6.70 Increased By ▲ 0.10 (1.52%)
FLYNG 7.16 Increased By ▲ 0.13 (1.85%)
GGGL 11.60 Increased By ▲ 0.26 (2.29%)
GGL 17.51 Increased By ▲ 0.27 (1.57%)
GTECH 8.35 Increased By ▲ 0.05 (0.6%)
HUMNL 7.17 Increased By ▲ 0.11 (1.56%)
KEL 3.14 Increased By ▲ 0.06 (1.95%)
LOTCHEM 35.20 Increased By ▲ 2.33 (7.09%)
MLCF 28.35 Increased By ▲ 0.05 (0.18%)
OGDC 87.70 Increased By ▲ 3.15 (3.73%)
PAEL 16.63 Increased By ▲ 0.18 (1.09%)
PIBTL 6.05 Increased By ▲ 0.20 (3.42%)
PRL 19.46 Increased By ▲ 1.34 (7.4%)
SILK 1.14 No Change ▼ 0.00 (0%)
TELE 11.41 Increased By ▲ 0.31 (2.79%)
TPL 9.20 Increased By ▲ 0.20 (2.22%)
TPLP 20.25 Increased By ▲ 0.37 (1.86%)
TREET 27.10 Increased By ▲ 0.48 (1.8%)
TRG 96.20 Increased By ▲ 1.70 (1.8%)
UNITY 20.85 Increased By ▲ 0.48 (2.36%)
WAVES 13.90 Increased By ▲ 0.27 (1.98%)
WTL 1.34 Increased By ▲ 0.03 (2.29%)
BR100 4,275 Increased By 67 (1.59%)
BR30 15,794 Increased By 348.3 (2.26%)
KSE100 42,872 Increased By 628.4 (1.49%)
KSE30 16,219 Increased By 247.6 (1.55%)

SYDNEY: Australian Prime Minister Scott Morrison was dealt an election blow on Tuesday after the country’s central bank raised rates in the middle of a tough campaign, which could further increase living costs and hamper his party’s prospects at the polls.

The Reserve Bank of Australia (RBA) lifted its official cash rate to 0.35% from record low of 0.1% in a bid to contain surging inflation and signalled more tightening to come.

Morrison, trailing in polls ahead of a national election to be held on May 21, said Australians had been preparing for a hike in interest rates “for some time” but conceded the decision would be difficult for some.

“Throughout the pandemic, we have seen them double buffers on their mortgages … and strengthen their balance sheets in preparation,” Morrison said at a media briefing.

“For those who are paying more, that will be hard and we understand that.”

The hike in rates means millions of Australians will have to cough up more money on their mortgages for the first time since 2010. Cheap loans fuelled a housing boom last year, a windfall for household wealth and consumer confidence, but that has also raised affordability concerns.

With inflation rising twice as fast as wages, real incomes are in the red putting pressure on Morrison’s Liberal-National coalition, that has a one-seat majority in the lower house of parliament. Centre-left Labor is ahead in polls.

Australia’s central bank hikes interest rates, flags more to come

The last time the RBA increased rates during an election campaign was in 2007, and then Prime Minister John Howard went on to lose both the vote and his seat.

Asked by reporters whether he had just lost the election, Morrison said: “Of course not”. Voters would understand the rate hike was due to global events and not the government’s handling of the economy, he said.

Morrison blamed the war in Ukraine and the COVID-19 lockdown in China for the inflation shock but argued Australia was in a better economic position than many developed nations.

An ANZ survey out earlier in the day showed Australian consumer sentiment dropped 6% last week as high inflation numbers fuelled concerns about the cost of living.

Comments

Comments are closed.