RBA Governor Michelle Bullock stressed that people on low and fixed incomes were hardest hit, with some even being forced to sell their homes. Play Video
RBA boss kills hopes of imminent interest rate cut
RBA boss kills hopes of imminent interest rate cut
Michelle Bullock, governor of the Reserve Bank of Australia, said Australians had “forgotten” the dangers of high inflation. Michelle Bullock, governor of the Reserve Bank of Australia, stressed that people on low incomes and fixed incomes were hit hardest, with some even forced to sell their homes.
The Reserve Bank of Australia governor stressed after a weak economic growth report that high inflation “hurts everyone”, especially those on low and fixed incomes.
Governor Michele Bullock warned that rising prices would eat into savings and erode purchasing power, and if inflation remained high for a long time, more borrowers would face mortgage stress and some would even be forced to sell their homes.
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“One thing to note here is that low-income borrowers are overrepresented among the people who are really struggling,” Block told the Anika Foundation on Thursday.
Her comments came after Australia’s economy grew by just 0.2 per cent in the June quarter and by 1.2 per cent for the full year.
The Reserve Bank of Australia expects the data to be dovish, anticipating that a slowing economy will lead to higher interest rates, which if kept high will weaken demand and reduce inflation.
However, the weak economy means a deteriorating labor market and rising unemployment, which the central bank has been trying to mitigate by tolerating the path of inflation to its target longer than many of its peers.
Bullock said in his speech that the board was seeking to strike the “right balance” between the RBA’s inflation and full employment goals.
“Given our starting point of high inflation and relatively tight labor markets, and the fact that low and stable inflation will ultimately support our goal of maximum employment, our first priority has been and remains reducing inflation,” she said.
Reserve Bank of Australia Governor Michelle Bullock discusses high inflation at the Anika Foundation lunch in Sydney. Picture: AAP
The stance on the future path of interest rates has not changed much since the August board meeting.
The board still believes that if the economy develops as expected, “it would be premature to consider a rate cut.
Much of the speech was devoted to the importance of reducing inflation.
She said people under 40 were experiencing high inflation for the first time and many Australians had “forgotten how bad it was.
“There’s a reason people are so keen on discussing the cost of living.
“High inflation hurts everyone, especially the most vulnerable.”
