This week, the Reserve Bank raised the official cash rate by 25 basis points from a record low of 0.1%. The cash rate now stands at 0.35%. This was the first hike since November 2010 and marks the beginning of the end of ultra-cheap money. It comes off the back of a strong inflation report last week, which blew the Reserve Bank’s estimates out of the water. Following its April meeting, the RBA suggested that the Board were inclined to wait until the latest inflation and wages reports were released. But with the surge in inflation, and wage pressures increasing across the economy as businesses compete for workers in a tight labour market, the Reserve Bank couldn’t afford to wait any longer.
Where are interest rates likely to go over the next year?
And what is the outlook for the economy, unemployment and inflation?
See our short video below to find out.
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