RBA Data Contradicts Bank's Claims on Rate Hikes

The Reserve Bank of Australia (RBA) has been at odds with its own data on the impact of interest rate rises on living costs. According to a recent survey, 25% of respondents believed that higher interest rates would lead to lower inflation, while over half thought they would lead to higher inflation.

RBA Governor Michele Bullock explained that rate rises aim to reduce 'inflationary pressures' and curb wage growth by increasing unemployment. However, when asked about the short-term effects of rate hikes on inflation, Bullock stated that they 'won't do anything in the next six months.'

The data tells a different story: the cost of living for working households rose 1.5% in the June quarter, driven mainly by higher mortgage payments. This is significantly higher than the official inflation rate of 0.6%. The RBA's own cost of living index shows that employee households saw their costs rise 2.9% over the past six months, compared to a mere 2.0% increase in inflation.