The Reserve Bank has increased interest rates to 4.5 percent, sparking claims business will be "significantly hurt"
May 4, 2010
The Reserve Bank of Australia (RBA) Board has today increased the cash rate by 25 basis points to 4.5 percent.
RBA Governor Glenn Stevens says the increase is aimed at striking a balance on the cash rate.
“The Board expects that, as a result of today’s decision, rates for most borrowers will be around average levels,” Stevens says.
“This represents a significant adjustment from the very expansionary settings reached a year ago,” he says.
Today’s increase is the latest in a string of rate hikes, which has seen the official cash rate steadily rise from 3.25 percent in October last year.
“The Board will continue to assess prospects for demand and inflation, and set monetary policy as needed to achieve an average inflation rate of 2–3 percent over time,” Stevens adds.
RATE RISE WILL ‘HURT’ BUSINESS: CCIQThe Chamber of Commerce Industry Queensland(CCIQ) has been quick to respond to today’s interest rate announcement, warning the increase will “significantly hurt” businesses.
CCIQ President David Goodwin says business in Queensland alone has suffered blows in the last week from announcements of workers compensation premium increases, superannuation increases and the promise of a resource super profits tax.
“In addition, come July 1 businesses will experience 13.6 percent increase in energy bills and significant increases in all award rates of pay, penalties and allowances as we transition to modern awards and Fair Work Act Australia’s minimum wage increase,” Goodwin says.
“When will the RBA, federal and state governments realise that businesses do not have bottomless pockets to be able to solve and fund all of the countries financial and social issues,” he says.
“As a result of this week’s announcements some businesses will question whether it is worth keeping their doors open.”