RBA on High Alert as Inflation Surges to 3.8%, Experts Predict Rate Hike as Early as May
In a surprise move, economists are predicting that the Reserve Bank of Australia (RBA) could raise interest rates as early as May, following a sharp climb in inflation to 3.8% in October, up from 3.6% in September.
The latest inflation figures have dealt a blow to hopes for further rate cuts, with analysts warning that underlying inflation is on the rise and housing costs are accelerating out of control. The RBA's interest rates have been steady since August last year, but experts now believe that the central bank will need to act quickly to stem the tide of rising prices.
"We're seeing more inflation persistence than we had expected," said Jo Masters, chief economist at Barrenjoey. "Housing inflation is simply running too fast to be consistent with inflation at target." Masters predicts that the RBA will hike rates in May and again in August to combat the surge in housing costs.
The latest inflation figures also mask a rise in childcare costs, which jumped 11% over the past year, as well as soaring gold and silver prices, which have driven up accessory prices by 12%. The price of electricity has surged by 37%, largely due to the withdrawal of generous state government subsidies.
Despite these rises, experts say that inflation is unlikely to ease in the short term. "In year-ended terms, this is the biggest increase" in the monthly electricity index, said David Gruen, head of the Australian Bureau of Statistics (ABS).
The RBA has a history of responding quickly to inflation surges, and economists predict that interest rates will rise in May. However, some experts believe that the bar to rate hikes is high, and that the RBA may not act until February.
As the debate over electricity prices continues, Treasurer Jim Chalmers has left the door open for further energy bill relief measures, including extending household subsidies beyond this year. "We've been very clear and very upfront for some time now – this electricity bill relief is really important," he said.
In a surprise move, economists are predicting that the Reserve Bank of Australia (RBA) could raise interest rates as early as May, following a sharp climb in inflation to 3.8% in October, up from 3.6% in September.
The latest inflation figures have dealt a blow to hopes for further rate cuts, with analysts warning that underlying inflation is on the rise and housing costs are accelerating out of control. The RBA's interest rates have been steady since August last year, but experts now believe that the central bank will need to act quickly to stem the tide of rising prices.
"We're seeing more inflation persistence than we had expected," said Jo Masters, chief economist at Barrenjoey. "Housing inflation is simply running too fast to be consistent with inflation at target." Masters predicts that the RBA will hike rates in May and again in August to combat the surge in housing costs.
The latest inflation figures also mask a rise in childcare costs, which jumped 11% over the past year, as well as soaring gold and silver prices, which have driven up accessory prices by 12%. The price of electricity has surged by 37%, largely due to the withdrawal of generous state government subsidies.
Despite these rises, experts say that inflation is unlikely to ease in the short term. "In year-ended terms, this is the biggest increase" in the monthly electricity index, said David Gruen, head of the Australian Bureau of Statistics (ABS).
The RBA has a history of responding quickly to inflation surges, and economists predict that interest rates will rise in May. However, some experts believe that the bar to rate hikes is high, and that the RBA may not act until February.
As the debate over electricity prices continues, Treasurer Jim Chalmers has left the door open for further energy bill relief measures, including extending household subsidies beyond this year. "We've been very clear and very upfront for some time now – this electricity bill relief is really important," he said.
i cant even believe rba is goin to raise interest rates again 
i mean i know inflation is high but cant we just chill for a sec? 
i just got a new phone and its already stressing me out about the new plan lol 
i dont think ill be able to afford anything rn 
anyway lets hope treasurer chalmers can save us from all these energy bill increases 
maybe they will extend those household subsidies again? 
please let them do something about childcare costs too 
its literally 11% in one year 
This inflation thing is getting crazy! 3.8%?! I don't know how much more of these rate hikes we can handle, tbh. 
Housing costs are through the roof and it's not just in Sydney and Melbourne, I've been hearing from friends in other cities too. It's like they're saying that if you want to live anywhere, you have to be prepared for insane prices! 
I'm not buying all the hype about RBA raising interest rates as early as May 
. Experts are being way too cautious, if you ask me 
. We need some economic stimulus to get people spending and investing again 
. And what's with all the focus on housing costs? Can't we talk about something else for once? 
The real issue is Australia's energy policy 
. If we can sort out our electricity prices, we might not need those interest rate hikes in the first place 
and it's only getting worse. i was thinking we'd see some rate hikes by now, but may is still kinda early for me. what do you think? 
anyway, gotta keep an eye on the economy, cant just sit back and watch our money disappear 
ugh, inflation's getting outta control in Oz! 
i remember when i was a teenager, my parents would always stress about the economy and stuff. now it seems like they were right all along... 
anyway, back to this: if the RBA raises rates in May, that's gonna crush some people who can't afford it 
what's next, rent control? 
, inflation's got everyone on edge! 
, might as well hike those interest rates already 
keeping the door open for energy bill relief measures is a great idea 
hope it brings some relief from those soaring electricity prices 
. I'm thinking we'll see rate hikes in May now, which means more money for our mortgages and loans 
. On a related note, have you seen how much electricity prices have skyrocketed?! 37% is just ridiculous 
Housing inflation is outta control 
️
. Can't wait to see what May brings 
i think the rba should act fast like masters said might be might be june/july instead of may tho 
what's going on here? 
and now the RBA is gonna raise interest rates again... like what's the point of saving money if we're just gonna have to pay more for everything?