The war in the Middle East and ‘excessive’ levels of government spending have contributed to the rebound in inflation and interest rates in Australia
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As universally expected by economists and financial markets, the Reserve Bank’s monetary policy board on Tuesday lifted its cash rate by 25 basis points to 4.6%, the highest level since October 2011 (at the peak of the mining investment boom).
Treasurer Jim Chalmers has attributed this week’s decision – and the inflation concerns underpinning it – to the war in the Middle East. Others, including shadow treasurer Tim Wilson and some economists, blame it on “excessive” levels of, and growth in, government spending.