Experts caution that another interest rate hike today could push Australia into a recession, assuming it isn’t already in one. This perspective comes from Roy Morgan’s senior figures: Chairman Gary Morgan, CEO Michele Levine, and Marketing Chief Julian McCrann, who argue that the anticipated rate increase would be “a mistake.”
The Reserve Bank of Australia is set to convene at 2:30 PM, with expectations of a 0.25 percent rate increase to 4.35 percent. Many economists predict that rates will climb further before the year ends.
This marks the third consecutive rate hike following a brief period of stability for homeowners.
The article highlights growing concerns among businesses about the economic situation, alongside rising pessimism among Australian consumers.
“The Reserve Bank should avoid making a historic error by increasing interest rates for a third consecutive month, risking an unnecessary recession,” the article states.
“The Reserve Bank SHOULD NOT make a historic mistake tomorrow and raise interest rates again for a third straight month that will force Australia into the ‘recession we don’t have to have,” it said.
The article notes the latest Roy Morgan Business Confidence for April shows the index crashing 14.2 points in April to a record low of only 76.5.
That’s below the previous record low reached at the onset of the COVID-19 pandemic in 2020.
Plus the latest ANZ-Roy Morgan Consumer Confidence Rating is at only 67.8 â over 30 points below the neutral level of 100.
This is the seventh-lowest Consumer Confidence reading of all-time, it says.
“A further increase to official interest rates, tomorrow, on top of two interest rate increases by the RBA already in February and March â by a total of 0.5 per cent to 4.1 per cent – will increase mortgage stress, real unemployment and under-employment and ensure the damage to the Australian economy is needlessly increased and a likely deep recession guaranteed,” it says.
A survey by comparison site Finder shows one in 10 mortgage holders (297,000 mortgagors) would be unable to repay their home loan if they were hit by one or two more increases.
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