After Wednesday’s larger-than-expected inflation number, all attention has turned to the Reserve Bank’s meeting on Tuesday. If the bank moves next week, it will be the first time there’s been a rise in a campaign since 2007, the election John Howard lost.
Pointing to recent rate rises overseas, independent economist Saul Eslake says: “If the Reserve Bank were to do nothing in the face of this much sharper-than-expected acceleration in inflation, it would be leaving itself open to a charge of acting in a political way, which would undermine its credibility for an extended period.
"So I think the Reserve Bank really has to raise interest rates at its meeting next week.” If it doesn’t, Governor Philip Lowe would require “a very persuasive explanation”.
