Australian interest rates

With the federal election due by 20 May 2025, polling suggests Australia is headed for a hung parliament.

Today’s inflation print was another classic divide between pragmatists and purists.

New research by Finder revealed that one-in-three mortgage holders, or around one million households, believe that they borrowed too much, up from 21% last year. Almost half (46%) of gen Z claim that they stretched themselves thin, followed by millennials (37%).

The Australian Bureau of Statistics (ABS) has released the all-important Q3 Consumer Price Index (CPI) data, which undershot economists and the Reserve Bank of Australia’s (RBA) expectations.

The RBA has been aware of the possibility that consumer spending could be stronger than projected, especially given the significant boost to household income from the Stage 3 tax cuts.

Labor has lost power in Queensland after incurring a swing of more than 7% against it.

CBA senior economist Stephen Wu has released a preview of next week’s Q3 CPI inflation release from the Reserve Bank of Australia (RBA). CBA expects that headline CPI rose by 0.3% over Q3 to be 2.9% higher year-on-year, driven by lower electricity prices (-16%) via rebates and fuel declines (-6%).

The International Monetary Fund’s (IMF) latest World Economic Outlook report forecasts that Australia and Slovakia will be the only two advanced economies with headline inflation above 3% by the end of 2025.

Last week, the Australian Bureau of Statistics (ABS) released a stronger-than-expected employment report, with 64,000 jobs created in September (51,600 full-time), a 0.1% decline in the nation’s unemployment rate, and record participation and employment-to-population rates.

Twice this month, I have attacked the Coalition’s Andrew Bragg for promising to ease lending standards to help, including by scrapping responsible lending laws (see here and here).

The RBA is still going to cut in December.

The Actuaries Institute reported in August that 1.6 million Australian households were experiencing financial stress as a result of escalating home insurance costs.

By Gareth Aird, head of Australian economics at CBA.

The latest election polling from Roy Morgan shows that Labor and the Coalition are tied 50%-50% on a two-party preferred basis.

Sometimes reading the AFR is like shooting fish in a barrel: Local borrowers are getting restless and wondering why Reserve Bank of Australia governor Michele Bullock says the RBA board does not expect to cut interest rates this year based on its economic outlook.

At its September monetary policy meeting, the RBA suggested that the official cash rate would remain on hold for the foreseeable future.

CBA’s non-consensus call predicting that the Reserve Bank of Australia (RBA) will cut rates before Christmas is looking prescient following the latest inflation data from the Melbourne Institute.

With the federal election due by May 2025, all polling suggests that we are headed for a hung parliament.

The Australian Bureau of Statistics (ABS) has released retail sales data for August, which jumped by a strong 0.7% over the month to be 3.1% higher year-on-year: The result smashed economists’ expectations of a 0.4% monthly increase.

Stephen Wu, senior economist at CBA, has published research showing how Australians are overwhelmingly using the extra disposable income from the Stage 3 tax cuts to pay down debts.

Treasurer Jim Chalmers recently claimed that the RBA was “smashing the economy” by keeping interest rates high.