Key events
Reserve Bank poised to hike rates at 2.30pm
Patrick Commins
The Reserve Bank board is widely expected to hike rates at 2:30pm today amid a global energy shock that threatens to push inflation towards 5%.
A hike would take the RBA’s cash rate target from 3.85% to 4.1%, marking the second consecutive increase after the February move.
If the economists and analysts are right, someone with a $600,000 mortgage and 25 years will see their repayments rise by another $91 a month.
Central bankers worldwide are recalibrating their plans in the wake of a broadening Middle East conflict that has sent petrol prices soaring and triggered fears of fuel shortages.
The RBA would normally look past a short-term hit to energy prices.
But inflation is already elevated at 3.8% – well above the bank’s 2-3% target – and that has left the central bank with little wriggle room and worried that rapid price increases will start to become embedded in Australia’s collective psyche.
Economists will be looking at whether the decision was unanimous, and for any indication in the board’s statement and Bullock’s press conference (at 3:30pm) that there could be a third straight hike at the May meeting.
Adeshola Ore
The energy minister, Chris Bowen, says it will take “some time” for the petrol and disesel released from Australia’s domestic stockpile to reach areas hit by shortages.
On Friday, the Albanese government directed fuel companies to release nearly a fifth of reserve petrol and diesel supplies. Dozens of service stations across the country have run out of petrol as retailers struggle with customers panic-buying in response to skyrocketing prices from the Middle East conflict.
In an interview with ABC’s 7.30 last night, Bowen said companies had ensured the government the released supply would reach regional areas:
There will be some time for it to flow through. There’s a very complicated supply chain.
But it is going to have an impact. Some companies have said it will start to have an impact in coming days, to some degree. But there will be some time before it’s all released.
Welcome
Good morning and welcome to our live news blog. I’m Martin Farrer with the best of the overnight stories and then it will be Nick Visser to guide you through the news day.
The economy and cost of living will be one of the big stories today with the Reserve Bank expected to raise interest rates when it announces the outcome of its monetary policy meeting at 2.30pm. The main reason is persistent inflation, further fuelled by war-boosted petrol prices.
Speaking of which, we have Chris Bowen’s comments on fuel shortages coming up – he says the nation’s fuel reserves are being poured into the market but may not have an immediate obvious effect.