The Reserve Bank of Australia (RBA) are expected to hand down their interest rate decision today, amidst frenzied speculation of a guaranteed rise that will see many homeowners and small businesses feeling the pinch.
Prime Minister Kevin Rudd has backed Treasurer Wayne Swan’s warning to financial institutions that there is no excuse for raising interest rates above the RBA’s recommendation, with many economists predicting a rate rise as a foregone conclusion.
A 25-basis-point increase would see the cash interest rate steady at four percent.
The Prime Minister explained, “Australia was the only advanced economy in 2009 not to go into recession. That’s come off the back of strong action by ourselves through our national stimulus strategy, school modernisation plan and through the banks, to bring down interest rates as radically and quickly as they did.”
“But obviously there’s going to be upward adjustment.”
However, Opposition Treasury spokesman Joe Hockey said the governent’s stimulus spending was increasing the chances of an interest rate hike.
“Today’s data puts enormous pressure on the Reserve Bank to increase interest rates because the Government continues to spend so much money,” he said.
