RBA did the right thing. But the real pain is just beginning
The central bank’s experiment means borrowers face higher mortgage repayments on top of additional cost-of-living pressures imported from the crisis in the Middle East.
The upside inflation risk posed by the Iran war oil shock’s impact on petrol prices gave the Reserve Bank seemingly little option but to raise the cash rate by 0.25 percentage points to 4.1 per cent on Tuesday. Yet the vote of the monetary policy board was 5-4 to increase official interest rates. Governor Michele Bullock says there was consensus around the table on the need for a rate rise, but opinions differed on the timing.
Plumes of smoke and fire rise after debris from an intercepted Iranian drone struck an oil facility in the United Arab Emirates at the weekend. AP
