Greg Jericho says the most recent figures on inflation, wages, unemployment and economic growth simply do not support today’s decision to raise the cash rate from 4.35% to 4.60%.
“There is no data to support this rate rise,” he said.
“Since the last RBA meeting unleaded petrol prices have risen around 34 cents per litre – that has already hit households.
“In August households spent less on food, clothing, household good and health care, as they cut back to make up for the surge in petrol prices.
“Inflation maybe stubborn due to the war in Iran and the international boom in datacentres, but it is still falling. Unemployment is rising, but clearly the RBA wants it to rise even more. Wage growth has slowed and GDP growth is sluggish.
“The RBA argues this is about inflation, but that has absolutely nothing to do with Australians earning too much, spending too much or an overheating economy.
“This is about oil and datacentres – and, no matter what it does, the RBA cannot stop Donald Trump bombing Iran or reopen the Strait of Hormuz.
“The Reserve Bank simply cannot fix this. Today’s rate rise will do nothing to bring inflation down. What it will do is inflict more unnecessary pain on Australian mortgage holders.”
