What happened
Australia is experiencing rising unemployment and stubbornly high inflation, with a potential interest rate hike looming. The Reserve Bank of Australia is expected to raise the official interest rate to 4.6 percent, a near-15-year high. Deputy Prime Minister Richard Marles acknowledged that households are struggling, but expressed optimism that better days are ahead.
Inflation is expected to rise from 3.5 to 4 percent, driven in part by high fuel prices resulting from conflict in the Middle East. The government has rejected calls to reinstate a previous cut to fuel taxes to help ease the burden on road-users. Opposition frontbencher James Paterson attributed the inflation to runaway government spending, which he believes is driving up inflation and forcing the Reserve Bank's hand.
The jobless rate has jumped to its highest level in almost five years, and housing sentiment and prices have been driven down by consecutive rate hikes and the removal of tax concessions for property investors. Auction clearance rates have slumped to a 10-week low, indicating potential further price falls.
