Bah, humbug! Retail sector sobers up before silly season begins
Some thought Christmas had come early when the RBA leadership changed. But this was an illusion, with rates likely going up again next month.
It's the state of the economy, not the choice of central bank top brass, that ultimately impacts interest rate movements. And Australians are about to realise that new Reserve Bank boss Michele Bullock isn't Santa Claus any more than former governor Philip Lowe was the Grinch.
Because all four of the big banks are now expecting a rate rise before Christmas.
Luci Ellis, a former RBA assistant governor, made her first call on interest rates in her new job as Westpac's chief economist this week. Due to hot inflation data, which at 1.2% was 0.1 percentage points higher than expectations, she expects a rate rise next month.
“A 0.1% difference might not seem like a lot, but the underlying detail was sobering,” Ellis said in a note. She joins NAB (which has maintained its view another 25 basis point rise is required), ANZ and the Commonwealth Bank in expecting a rate rise.
