The Times Australia
The Times World News

.
The Times Real Estate

.

Economist Chris Richardson on a likely interest rate rise and the fall in living standards

  • Written by Michelle Grattan, Professorial Fellow, University of Canberra

The International Monetary Fund (IMF) released a report this week calling on Australia to raise interest rates again, adding to the speculation the Reserve Bank will increase the cash rate on Tuesday.

If that happens it will be yet another blow to many household budgets, already under strain from the rises in the prices of food, fuel and power.

In this podcast, independent economist Chris Richardson joins The Conversation to discuss the expectations about a rate rise, “sticky” inflation, the fall in the standard of living, the difficulty of the government responding to the cost-of-living crisis, and a bleak prospect as we go into 2024, before we reach some light at the end of a long tunnel.

Asked whether a rate rise next week is virtually a foregone conclusion or whether there’s still some doubt, Richardson says:

Never say never on something like interest rates. But the new Reserve Bank governor did pretty clearly put a line in the sand and then almost straight away, the inflation numbers seemed to cross that line. So like most economists, I do expect Tuesday […] we’ll see a further rise in interest rates.

On the issue of living standards in Australia he says:

I’m surprised that there is not more discussion of arguably the key number in economics, our living standards – basically the amount of money that people have, disposable income. So you take out tax, you take out interest payments, you look at that per head, you put it in today’s prices – that peaked in September ‘21. It was artificially high during COVID, but it is down almost 10% since then. And that fall is rather larger than anything Australia saw in recessions in decades past.

Asked what can or should the government do about the cost-of-living crisis, Richardson say:

It can’t do much. When we talk about a cost-of-living crisis, we’re saying that inflation is dragging down our living standards and that that’s a problem. Now, if governments could solve that, not just Australian governments, past governments as well as the current one, other governments around the world, if they had a magic wand, they would have been waving that magic wand pretty madly. They don’t. And that’s the trick.

In current circumstances, if you give people extra money, well, of course they’ll spend it […] and that would simply push inflation up again. And indeed, if the government did enough of that it wouldn’t just push inflation up again, it could make the Reserve Bank raise rates again. In other words, a cost-of-living problem is a wicked one for governments to do something about.

Read more https://theconversation.com/politics-with-michelle-grattan-economist-chris-richardson-on-a-likely-interest-rate-rise-and-the-fall-in-living-standards-216836

The Times Features

Understanding the Dangers of Ignoring a Gas Leak

Gas leaks are silent threats lurking within both homes and workplaces. A gas leak occurs when natural gas or any other gaseous substance escapes from a pipeline or containment. T...

Can You Sell Your House Privately in Queensland? Here’s How

Selling a house privately in Queensland is entirely possible and can be a cost-effective alternative to using a real estate agent. While agents provide valuable expertise, their co...

Itinerary to Maximize Your Two-Week Adventure in Vietnam and Cambodia

Two weeks may not seem like much, but it’s just the right time for travelers to explore the best of Vietnam and Cambodia. From the bustling streets of Hanoi to the magnificent te...

How to Protect Your Garden Trees from Wind Damage in Australia

In Australia's expansive landscape, garden trees hold noteworthy significance. They not only enhance the aesthetic appeal of our homes but also play an integral role in the local...

Brisbane Homeowners Warned: Non-Compliant Flexible Hoses Pose High Flood Risk

As a homeowner in Brisbane, when you think of the potential for flood damage to your home, you probably think of weather events. But you should know that there may be a tickin...

Argan Oil-Infused Moroccanoil Shampoo: Nourish and Revitalize Your Hair

Are you ready to transform your hair from dull and lifeless to vibrant and full of life? Look no further than the luxurious embrace of Argan Oil-Infused Moroccanoil Shampoo! In a...

Times Magazine

"Eternal Nurture" by Cara Barilla: A Timeless Collection of Wisdom and Healing

Renowned Sydney-born author and educator Cara Barilla has released her latest book, Eternal Nurture, a profound collection of inspirational quotes designed to support mindfulness, emotional healing, and personal growth. With a deep commitment to ...

How AI-Driven SEO Enhancements Can Improve Headless CMS Content Visibility

Whereas SEO (search engine optimization) is critical in the digital landscape for making connections to content, much of it is still done manually keyword research, metatags, final tweaks at publication requiring a human element that takes extensiv...

Crypto Expert John Fenga Reveals How Blockchain is Revolutionising Charity

One of the most persistent challenges in the charity sector is trust. Donors often wonder whether their contributions are being used effectively or if overhead costs consume a significant portion. Traditional fundraising methods can be opaque, with...

Navigating Parenting Arrangements in Australia: A Legal Guide for Parents

Understanding Parenting Arrangements in Australia. Child custody disputes are often one of the most emotionally charged aspects of separation or divorce. Parents naturally want what is best for their children, but the legal process of determining ...

Blocky Adventures: A Minecraft Movie Celebration for Your Wrist

The Minecraft movie is almost here—and it’s time to get excited! With the film set to hit theaters on April 4, 2025, fans have a brand-new reason to celebrate. To honor the upcoming blockbuster, watchfaces.co has released a special Minecraft-inspir...

The Ultimate Guide to Apple Watch Faces & Trending Wallpapers

In today’s digital world, personalization is everything. Your smartwatch isn’t just a timepiece—it’s an extension of your style. Thanks to innovative third-party developers, customizing your Apple Watch has reached new heights with stunning designs...

LayBy Shopping