Category Archives: Interest rates

Collapse in new home listings in Sydney and Melbourne hits real estate company profits

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Domain chief Jason Pellegrino says decline is worse than during Covid lockdowns and banking royal commission

A collapse in the number of new homes on the market, especially in Sydney and Melbourne, is outpacing even the shaky listing rates recorded during pandemic lockdowns, weighing on the profits of real estate companies.

The chief executive of property portal company Domain Group, Jason Pellegrino, said on Thursday that the scale of listings declines during the last three months of 2022 also eclipsed pullbacks recorded during the banking royal commission, which scrutinised lending practices in public hearings in 2018.

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More light and less heat would be appreciated at Philip Lowe’s next grilling on Friday

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Lost in the questioning from hostile senators was much insight into why the Reserve Bank wants to keep raising rates

There’s no doubt the Reserve Bank governor Philip Lowe’s appearance before Senate estimates on Wednesday was good theatre.

Dubbed by one media outlet as Australia’s “most-loathed banker”, Lowe parried questions from mostly hostile senators demanding to know why the central bank had inflicted a record nine interest rate rises in a row, with more to come.

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Australia politics live: Philip Lowe says RBA ‘still unsure’ how high interest rates will go during Senate estimates grilling

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RBA boss tells Senate estimates about rationale for rate rises as Adam Bandt demands end to new coal and gas projects. Follow live

Around and around we go …

So CBA shareholders are to get a (fully franked) dividend of $2.10 for each of their share – 20% more than the last time dividends were sent out.

We reported strong financial and operational performance in our financial results for the six months ended 31 December 2022. Our cash net profit after tax of $5,153 million reflects the Bank’s customer focus and disciplined strategic execution. Our continued balance sheet strength and capital position creates flexibility to support our customers and manage potential economic headwinds, while delivering sustainable returns to shareholders. A fully franked interim dividend of $2.10 per share was determined, an increase of 20% on 1H22, driven by organic capital generation and a reduction in share count from share buy-backs. Despite the current uncertainty, your Board and management feel optimistic for the future and are committed to delivering for our customers and for you, our shareholders

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Four questions the RBA and Philip Lowe may face during grilling from MPs

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Further rate rises, Reserve Bank strategy, transparency and whether to extend Lowe’s term are likely to come under scrutiny

When Philip Lowe fronts Senate estimates on Wednesday and the House of Representatives’ economics committee on Friday, the governor of the Reserve Bank of Australia will be peppered with questions about the central bank’s performance and thinking.

Here are four key issues he and his RBA colleagues will likely be asked about during the review of the central bank.

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Australia politics live: Inland Rail review reveals ‘significant concerns’; senator asks if MPs’ phones safe from hackers

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Critics of project left frustrated and ‘ignored’ by previous government’s failure to heed views of regional communities. Follow the day’s news live

Joyce v Plibersek

Can there be a greater punishment than being the Labor MP chosen to “debate” Barnaby Joyce on commercial TV each week?

Well this Treasury analysis shows that price rises will be moderated, they won’t go up as much as was initially predicted and that’s because our policies are working, and it’s a shame that Barnaby and his side actually voted against the policies that have brought down energy prices in Australia, on top of not doing anything when they were in government to prepare for these energy price rises.

But we know that families are still doing is tough and that’s why we’re also delivering cheaper medicine, cheaper childcare, free Tafe and higher wages.

Well, you just heard it there. It’s the great swindle. Remember they said they were going to bring down the price of electricity by $275. Now they’re lauding the fact that it’s still going up and it will continue to go up, and at some time in the future, listen to this, it won’t go up as much as they expected it to. Now if you think that is worth banking, good luck.

As everything, you will see Liddell get blown up* and this will be under the Labor party’s watch, another power station literally blown up, another restriction on power supplies as we reduce supply and increase price. And I don’t see anything marvellous happening in the future except a Labor party which thinks that the way to fix power prices is to cap the two evils. Remember they don’t believe in coal or gas, but they do believe in capping it because they do understand all of a sudden that it is absolutely connected to power prices.

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Brexit is a self-inflicted wound of unparalleled severity | Phillip Inman

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Quitting the EU has stalled business investment, making us reliant on workers who are now scarce. Hence rising wages, high inflation and increased interest rates. Result? A looming recession

Whenever Andrew Bailey, the governor of the Bank of England, talks about the economy, he is forced to mention the toll taken by Brexit.

Business leaders, initially reluctant to criticise the Tory decision to quit the EU, have begun to find their voice. Most recently, leading City figure Guy Hands called Brexit a “complete disaster” and a “bunch of total lies” that has harmed large parts of the economy.

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Jim Chalmers confident Australia will avoid recession despite warnings of more interest rate rises

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The treasurer also noted ‘very encouraging’ signs on power prices falling, saying Labor’s energy price relief package was working

The treasurer Jim Chalmers says there are “very encouraging” signs on power prices falling and is still confident Australia will avoid a recession despite continuing interest rate rises.

Last week in its first meeting for the year, the Reserve Bank increased the cash rate for the ninth time in a row to 3.35% and warned it was considering even more interest rate rises in coming months.

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Tanya Plibersek blocks Clive Palmer’s proposed coalmine – as it happened

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Complaints about telcos jumps 9.9% in last quarter of 2022

The number of complaints about telecommunications companies in the last three months of 2022 rose by 9.9% off the back of the Optus data breach.

We began to see the impact of the Optus data breach on our mobile complaint issues at the end of the previous quarter, but the complaints from this period of October to December really highlight the problems people are experiencing because of the breach.

Privacy and the unauthorised disclosure of personal information are not the only issues for consumers. We’re also handling an increased number of complaints from Optus customers about disputed termination fees, customer service problems, and failing to cancel a mobile service.

We’re continuing to work closely with Optus to ensure consistent approaches are being taken to resolving complaints so that people can get a fair and reasonable outcome, and we have adapted how we work to handle the higher volume of complaints we received.

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Australia news live: Peter Dutton to attend voice referendum working group meeting remotely

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Follow the day’s news live

The finance minister, Katy Gallagher, also spoke to ABC Radio this morning about how the government is balancing the budget with record high inflation, and all signs pointing to another rate hike from the RBA next week.

Gallagher says there will be mortgage pain for over a fifth of mortgage holders:

We’re expecting about 20% of mortgage holders to come off fixed rate loans this year.

We always said 2023 was going to be challenging year … Dealing with the inflation challenge is a key economic priority for the government.

What you’ll see is a continued focus on cost-of-living relief, funding those priority areas like health and aged care and making sure we’re getting the balance right in terms of spending restraint, banking upgrades and looking for sensible savings where we can.

There’s no doubt that migrants have been key to the formation of modern Australia.

I think [migrants] should be recognised for their contribution to this country. And I think that’s fair enough, but that’s not minimising the Indigenous.

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Australia’s softening inflation unlikely to spell an end to interest rate hikes

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The worst of the current inflationary cycle may be behind us, but the pain is probably not over for many households

When normally well-to-do shoppers of inner-west Sydney start trimming spending on fruit and vegetables, it’s a hint that households everywhere are feeling the pinch.

“Now people are really conserving what they are spending on,” said Yousef Lakda, owner of the Nature Spot greengrocer in Rozelle. “They walk in, they check your prices and they walk out and go and compare the prices … it wasn’t [like that] before.”

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How will drop in inflation affect plans to raise UK interest rates?

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Bank of England must proceed with caution as households are still cutting back and business confidence is weak

There is hope for households across Britain that inflation, finally, has peaked. After hitting a 41-year high of more than 11% in October as energy bills soared, the fall in the annual inflation rate in December for a second consecutive month will come as a relief.

However, prices remain high and are still rising fast. Lower inflation rates do not mean prices are falling for consumers; it is just that they are not rising quite as fast as a month ago. The cost of living crisis may be fading but it is very far from over.

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Federal Labor boasts about jobs growth while 90% of Australian bosses expect staffing shortages

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Expansion in first six months of Albanese government beats record of Kevin Rudd and Bob Hawke administrations

Federal Labor has boasted it has overseen the best jobs growth of any new government in 50 years but chief executives are fearful of finding workers in 2023.

The two sides of the jobs boom in Australia are demonstrated by an analysis released by the treasurer, Jim Chalmers, and a survey commissioned by the Australian Industry Group which found 90% of CEOs expected staffing shortages this year.

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Union fury over Labor decision to split aged care pay rises – as it happened

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Crossbench say Australia needs to ‘get cracking’ on Cop15 commitments

More reactions are coming in after the close of the biodiversity Cop15 – which leading scientists have called “vastly more important” than the Cop27 climate meeting, because it decides the “fate of the living world”.

We need to get cracking on implementation to deliver on commitments.

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Bank of England raises interest rates to 3.5% in ninth increase in a year

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Majority of MPC rate-setters back hike of 0.5 percentage points despite fears UK is entering a long recession

Mortgage payers are braced for higher borrowing costs, after the Bank of England pushed up its base rate by 0.5 percentage points to 3.5% despite saying inflation has peaked and Britain is about to enter “a prolonged recession”.

The Bank hiked interest rates on Thursday for the ninth time in a year, to the highest level in 14 years, but told borrowers to prepare for fresh increases in the new year.

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Australia news live: treasurer says full impact of interest rate rises still to come as RBA flags further hikes

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The central bank has raised the cash rate by 25 basis points to a decade high of 3.1%. Follow the day’s news

Shorten confident solution will be found ‘well before Christmas’

The national cabinet meeting was supposed to see the federal government negotiate with the states on an acceptable intervention on soaring energy prices.

It will be delayed just a few days. The fact of the matter is all options are on the table.

It’s no secret with the premiers, the challenge is Putin’s war in Ukraine has flowed through to coal and gas prices all around the world and it’s affecting Australian families.

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RBA tipped to lift cash rate again at board meeting as mortgage cliff looms

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Economists widely predict 25 basis point rise but some say central bank may consider pausing rates after seven straight hikes

The Reserve Bank is likely to give serious consideration to pausing interest rates for the first time since it began its record series of hikes, analysts say, but economists are still predicting an eighth consecutive increase when the board meets on Tuesday.

Concerns about the lagging effects of seven rate rises in as many months will be part of discussions at the monthly gathering. So, too, will the looming “mortgage cliff”, with at least $270bn in housing debt coming off historically low fixed-interest rates next year.

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Shares in UK’s top housebuilders fall as housing market cools

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Large estate agent chain’s profits also hit as interest rate rises and cost of living crisis put off potential buyers

Shares in one of the UK’s biggest estate agent chains and some of the largest British housebuilders fell on Friday, amid the latest warnings about the outlook for the housing market, as potential homebuyers are squeezed by rising interest rates and the cost of living crisis.

The share price of LSL Property Services, one of the UK’s largest estate agent chains, tumbled by as much as 11% after it warned on profits for the second half of the year and said conditions in the housing market had become more challenging than anticipated.

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Exodus of first-time buyers puts brakes on UK housing market

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Hike in mortgage costs after mini-budget cuts 20% off buyer demand in October

First-time buyers pulled back most from purchasing a home after the increase in mortgage costs following the mini-budget, according to a report showing a widespread slowdown in the property market.

Figures from the property platform Rightmove show buyer demand fell 20% in October compared with a year ago, as house-hunters put their property searches on hold in response to soaring borrowing costs and rising economic uncertainty.

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UK economy being held back by worsening health of British public, Andy Haldane warns

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RSA chief executive says more than a century of progress was now going into reverse

The worsening health of the British people is holding back economic growth for the first time since the Industrial Revolution after years of underinvestment in services, Andy Haldane has warned.

The chief executive of the Royal Society of Arts (RSA) said more than a century of progress on health and wellbeing was going into reverse, with a direct impact on the economy and the cost of living emergency.

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UK mortgage rate rises ‘will put extra 400,000 people in poverty’

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Analysis from Joseph Rowntree Foundation comes after Bank of England raised base rate

Higher monthly home loan costs will pull another 400,000 people into poverty in the coming year as the fallout from dearer mortgage rates ricochets through the housing market.

The Joseph Rowntree Foundation (JRF) said an extra 120,000 households, the equivalent of 400,000 people, will be plunged into poverty when their current mortgage deal ends.

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