Australia's Economy Faces Rising Unemployment and High Inflation Ahead of Interest Rate Hike
Australia's economy is facing rising unemployment and stubbornly high inflation as mortgage holders prepare for an interest rate hike. Deputy Prime Minister Richard Marles said households are 'doing it tough' but predicted better days ahead.
High fuel prices, driven by the ongoing conflict in the Middle East, have contributed to rising living costs. Inflation is expected to rise from 3.5% to 4% when latest figures are released on Wednesday.
The Reserve Bank of Australia (RBA) is set to lift the official interest rate to a near-15-year high of 4.6% on Tuesday, with many considering it a foregone conclusion. Central bankers in the US, Japan, and Europe have also raised interest rates in response to sky-rocketing oil and fuel prices.
Opposition frontbencher James Paterson said government spending is driving up inflation and forcing the RBA's hand. He argued that 'runaway spending' is influencing the Reserve Bank more than overseas conflict.