What we learned today, Tuesday 4 July
With that, we’ll wrap up our live coverage of the day’s news. Thanks so much for following along.
Here’s a summary of today’s main developments:
The Reserve Bank paused its cycle of lifting interest rates, leaving its official cash rate unchanged at 4.1%. This marks the second pause since May 2022 and while borrowers have been given a break, it may only be temporary.
Finance minister and acting treasurer Katy Gallagher said the pause was “welcome news” for households and that the RBA’s decision was likely based on the uncertainty around Australia’s economic outlook.
Shadow treasurer Angus Taylor said the government must use “every policy lever at its disposal” to take the pressure off inflation, arguing the government is showing “at best indifference and at worst incompetence” around the matter.
Prime minister, Anthony Albanese, hosted Indonesian president, Joko Widodo, in Sydney today, where the leaders announced a range of measures to boost trade and investment between the two countries.
Hong Kong police have issued arrest warrants for eight overseas activists in a move foreign affairs minister Penny Wong labelled “deeply concerning”.
Albanese celebrated the Australian men’s and women’s cricket teams opening match victories against England in The Ashes. Meanwhile, some Labor MPs have used the Australia-UK Ashes feud to further the republic movement, with Matt Thistlethwaite tweeting this is “Old Britain reminding new Australia of our place”.
Landlords are making bigger profits than ever, and more landlords than ever are making a profit, data from Better Renting has shown. The number of landlords making a profit was at an all-time high in 2020-21, with 53% of landlords making a net profit, totalling over $10bn.
Australia remains on alert for an El Niño developing later this year that increases the risks of drier and hotter weather, according to an update from the Bureau of Meteorology.
Updated
RBA pause welcomed but don’t expect it to last, economists say
The Reserve Bank’s decision to leave its key interest rate unchanged naturally brought a lot of relief for many (while irking those hoping for higher deposit rates).
A few economists are now predicting the RBA will raise the interest rate in August to 4.35% and that will be all it needs to do.
Those ranks include CBA, Australia’s biggest mortgage issuers, and UBS’s George Tharenou whose forecast of a July pause extended his streak of getting the rate call right to a neat 12 RBA meetings in a row.
Those smarting a bit include Westpac, which had predicted a rate rise today. They are sticking with a terminal rate (sounds painful) of 4.6%, with hikes to come in August and September.
The ANZ, which also had forecast a rise for July, is wavering a bit.
With the April pause followed by back‑to‑back rate hikes in May and June, we are reluctant to back away from our call of a 4.6% peak just yet,” said Adam Boyton, ANZ’s head of Australian Economics. “When and whether we get to that level is a little more uncertain in the wake of today’s pause.
Warren Hogan, Judo Bank’s chief economist, reckons the RBA will probably hike again in August but then wait a few months to see how inflation is travelling.
This blog, of course, will have all the key information as it comes to hand.
Updated
