Australian central bank hikes rate for 2nd time in 5 weeks

Jun 6, 2022, 10:01 PM | Updated: 10:40 pm
FILE - A man walks past the Reserve Bank of Australia building in Sydney, Australia on Oct. 7, 2021...

FILE - A man walks past the Reserve Bank of Australia building in Sydney, Australia on Oct. 7, 2021. Australia's central bank on Tuesday, June 7, 2022, lifted its benchmark interest rate for a second time in five weeks, changing the cash rate to 0.85% from 0.35%.(AP Photo/Mark Baker, File)

(AP Photo/Mark Baker, File)

CANBERRA, Australia (AP) — Australia’s central bank on Tuesday lifted its benchmark interest rate for a second time in five weeks, changing the cash rate to 0.85% from 0.35%.

When the Reserve Bank of Australia’s lifted the rate by a quarter percentage point at its last monthly board meeting on May 3, it was the first rate hike in more than 11 years.

An increase was widely expected after official data released in April showed that Australia’s inflation rose to 5.1% in the year through March. It is the highest annual rate since 2001, when a newly introduced 10% federal consumption tax created a temporary spike.

Treasurer Jim Chalmers on Tuesday foreshadowed more rate hikes, saying inflation in Australia would worsen.

“It’s clear already that inflation will be significantly higher than the 5.1% it is currently,” Chalmers told the Australian Broadcasting Corp. hours before the bank’s rate decision was announced.

“Inflation will get worse before it gets better. That’s the trajectory that we’ve inherited,” Chalmers added.

A May 21 election put Chalmers’ center-left Labor Party in power. It has criticized the level of debt accrued by the previous conservative administration.

Chalmers said he would update the nation on inflation when the Parliament resumes on July 26 for the first time since the election.

Reserve Bank Governor Philip Lowe said inflation was not expected to fall below 3% until next year.

The Reserve Bank of Australia adjusts interest rates to keep inflation within a 2%-3% target band.

“Inflation in Australia has increased significantly. While inflation is lower than in most other advanced economies, it is higher than earlier expected,” Lowe said in a statement.

“Global factors, including COVID-related disruptions to supply chains and the war in Ukraine, account for much of this increase in inflation. But domestic factors are playing a role too, with capacity constraints in some sectors and the tight labor market contributing to the upward pressure on prices,” Lowe added.

Inflation in the latest quarter was sharply higher than the 3.5% in the quarter before, driven by a surge in fuel and housing costs and damage to crops from recent floods.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - A woman wheels a cart with her purchases out of a Walmart, on Nov. 18, 2020, in Derry, N.H. ...
Associated Press

US retail sales were flat in July as inflation takes a toll

WASHINGTON (AP) — The pace of sales at U.S. retailers was unchanged last month as persistently high inflation and rising interest rates forced many households to spend more cautiously. Retail purchases were flat in July after having risen 0.8% in June, the Commerce Department reported Wednesday. America’s consumers, whose spending accounts for nearly 70% of […]
6 hours ago
Associated Press

Kids-for-cash judges ordered to pay more than $200M

Two Pennsylvania judges who orchestrated a scheme to send children to for-profit jails in exchange for kickbacks were ordered to pay more than $200 million to hundreds of children who fell victim to their crimes. U.S. District Judge Judge Christopher Conner awarded $106 million in compensatory damages and $100 million in punitive damages to nearly […]
6 hours ago
FILE - Illegal minors search for gold in the Ireng River on the Raposa Serra do Sol Indigenous rese...
Associated Press

Little talk of rainforest protection in the Brazilian Amazon

RIO DE JANEIRO (AP) — In the Brazilian Amazon these days, it’s nearly impossible to run for office talking up the environment. More common is a scene like this: A candidate for Congress parades a helicopter — the symbol of illegal gold mining — painted with the Brazilian flag, through the streets of the Amazon […]
6 hours ago
The NASA Artemis rocket with the Orion spacecraft aboard leaves the Vehicle Assembly Building movin...
Associated Press

NASA’s moon rocket moved to launch pad for 1st test flight

CAPE CANAVERAL, Fla. (AP) — NASA’s new moon rocket arrived at the launch pad Wednesday ahead of its debut flight in less than two weeks. The 322-foot (98-meter) rocket emerged from its mammoth hangar late Tuesday night, drawing crowds of Kennedy Space Center workers. It took nearly 10 hours for the rocket to make the […]
6 hours ago
FILE - This combination of photos shows logos for social media platforms Facebook and Twitter. Soci...
Associated Press

U.S. midterms bring few changes from social media companies

SAN FRANCISCO (AP) — Social media companies are offering few specifics as they share their plans for safeguarding the U.S. midterm elections. Platforms like Facebook and Twitter are generally staying the course from the 2020 voting season, which was marred by conspiracies and culminated in the Jan. 6 insurrection at the U.S. Capitol. Video app […]
6 hours ago
FILE - Elon Musk attends The Metropolitan Museum of Art's Costume Institute benefit gala on May 2, ...
Associated Press

Musk tweet joking about buying Manchester United causes stir

LONDON (AP) — Elon Musk caused a stir by tweeting that he was buying the English soccer team Manchester United — whose current owners are opposed by many fans — then saying several hours later that it was a joke. It comes as the billionaire Tesla CEO faces a legal battle in the U.S. after […]
6 hours ago

Sponsored Articles

...
Mayo Clinic Orthopedics and Sports Medicine

Why your student-athlete’s physical should be conducted by a sports medicine specialist

Dr. Anastasi from Mayo Clinic Orthopedics and Sports Medicine in Tempe answers some of the most common questions.
(Courtesy Condor)...
Condor Airlines

Condor Airlines shows passion for destinations from Sky Harbor with new-look aircraft

Condor Airlines brings passion to each flight and connects people to their dream destinations throughout the world.
...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
Australian central bank hikes rate for 2nd time in 5 weeks