The Reserve Bank of Australia lifted a key interest rate to an 11-year high of 6.75 percent yesterday, a move analysts say could hurt Australian Prime Minister John Howard's shot at re-election later this month.
After meeting on Tuesday, the bank said it chose to lift the benchmark cash rate by 25 basis points from 6.5 percent after recent data showed underlying inflation surging above the bank's target range of 2 percent to 3 percent.
A 33-year low in unemployment, strong commodity prices and robust growth in nonagricultural sectors of the economy added to the case for a hike.
In a statement, Reserve Bank Governor Glenn Stevens said the pace of economic growth had increased and that inflation was likely to be above 3 percent in the first three months of next year.
The decision yesterday was the 10th interest rate hike rise since May 2002 and fell just shy of the 7.5 percent rate in place when Howard's government first took power in 1996.
The rate increase was the first ever during an election campaign and was the sixth consecutive rise since Howard was re-elected in October 2004 on a promise of keeping interest rates low.
Australians are scheduled to vote on Nov. 24 and polls indicate that the main opposition Labor Party will defeat the 11-year old coalition government.
Many economists predict the Reserve Bank will lift rates again, possibly as early as next month, given the strength of the economy and the rising pace of inflation.
The Housing Industry Association's chief economist Harley Dale said around 100,000 Australian households would fall into financial stress as a result of the latest interest rate rise.
New home buyers were devoting on average 25 percent of their household incomes to their mortgages after the last election, Dale said. That figure would jump to around 33 percent on the back of the latest hike.
The Central Weather Administration (CWA) yesterday said it expected to issue a sea warning for Typhoon Fung-Wong tomorrow, which it said would possibly make landfall near central Taiwan. As of 2am yesterday, Fung-Wong was about 1,760km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, moving west-northwest at 26kph. It is forecast to reach Luzon in the northern Philippines by tomorrow, the CWA said. After entering the South China Sea, Typhoon Fung-Wong is likely to turn northward toward Taiwan, CWA forecaster Chang Chun-yao (張峻堯) said, adding that it would likely make landfall near central Taiwan. The CWA expects to issue a land
The Central Weather Administration (CWA) yesterday said it is expected to issue a sea warning for Typhoon Fung-wong this afternoon and a land warning tomorrow. As of 1pm, the storm was about 1,070km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, and was moving west-northwest at 28 to 32kph, according to CWA data. The storm had a radius of 250km, with maximum sustained winds of 173kph and gusts reaching 209kph, the CWA added. The storm is forecast to pass near Luzon in the Philippines before entering the South China Sea and potentially turning northward toward Taiwan, the CWA said. CWA forecaster Chang Chun-yao (張峻堯) said
PREPARATION: Ferry lines and flights were canceled ahead of only the second storm to hit the nation in November, while many areas canceled classes and work Authorities yesterday evacuated more than 3,000 people ahead of approaching Tropical Storm Fung-wong, which is expected to make landfall between Kaohsiung and Pingtung County this evening. Fung-wong was yesterday morning downgraded from a typhoon to a tropical storm as it approached the nation’s southwest coast, the Central Weather Administration (CWA) said, as it issued a land alert for the storm. The alert applies to residents in Tainan, Kaohsiung, Pingtung and Taitung counties, and the Hengchun Peninsula (恆春). As of press time last night, Taichung, Tainan, Kaohsiung, and Yilan, Miaoli, Changhua, Yunlin, Pingtung and Penghu counties, as well as Chiayi city and county had
The Central Weather Administration (CWA) yesterday issued a sea alert for Typhoon Fung-wong (鳳凰) as it threatened vessels operating in waters off the Pratas Islands (Dongsha Islands, 東沙群島), the Bashi Channel and south of the Taiwan Strait. A land alert is expected to be announced some time between late last night and early this morning, the CWA said. As of press time last night, Taoyuan, as well as Yilan, Hualien and Penghu counties had declared today a typhoon day, canceling work and classes. Except for a few select districts in Taipei and New Taipei City, all other areas and city
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