Category Archives: Interest rates

Bank of England, Fed and ECB poised to leave interest rates on hold

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Stubbornly high inflation forces central banks to avoid cuts, but markets expect falls next year

The western world’s largest central banks are poised to keep interest rates on hold this week amid concerns over stubbornly high inflation, despite growing expectations for sharp cuts in borrowing costs next year.

In a crunch week for the global economy, the US Federal Reserve, Bank of England (BoE) and European Central Bank are expected to keep interest rates at their current restrictively high levels to ensure inflation continues to fall back from the highest levels in decades.

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Bracket creep is cooling Australia’s economy – it’s good news for interest rates but not for household budgets

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The weak economy probably means the next RBA rates move – short of an inflation surprise next month – will be a cut

Philip Lowe used his final speech as Reserve Bank governor to call on fiscal policy to “provide a stronger helping hand” in managing inflation so the central bank didn’t have to carry most of the load – and the ire.

“Raising interest rates and tightening policy can make you very unpopular, as I know all too well,” Lowe said on 7 September, 10 days before many battling borrowers cheered him out the door.

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Australia news live: Reserve Bank to deliver year’s last interest rates decision as economists tip no change

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Poll finds 28 of 30 economists expect central bank to keep cash rate steady at 4.35%. Follow the day’s news live

Good morning, and happy Tuesday.

I’m Emily Wind and I’ll be with you on the blog today – many thanks to Martin for kicking things off.

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Australia politics live: Albanese says Israel-Hamas war protest at Melbourne hotel ‘beyond contempt’

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Follow the day’s news live

Chalmers: ‘We are making some welcome progress in the fight against inflation’

Is Jim Chalmers confident that interest rates could fall from next year?

My job is to focus on this fight against inflation. And we saw overnight from the OECD, we saw from Deloitte Access Economics, we saw in the Bureau of Statistics data which came out yesterday, that we are making some welcome progress in the fight against inflation and that will determine the future directory trajectory of interest rates

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Australia’s inflation rate eased to 4.9% in October, reducing likelihood of another rate rise as weak consumer spending reduces likelihood of another interest rate rise

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Consumer price index rose last month at an annual rate of 4.9%, which is lower than economists had forecast

Australia’s inflation rate has eased sharply in October as weak consumer spending made it less likely the Reserve Bank will inflict another interest rate rise on the economy.

The consumer price index rose at an annual clip of 4.9% last month compared with a 5.6% pace in September alone, the Australian Bureau of Statistics said on Wednesday. Economists had expected CPI to come in at 5.2%.

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Man found dead after statewide search – as it happened

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This blog is now closed.

Hostage release essential if truce to last, Paterson says

Rewinding to Liberal MP James Paterson’s appearance on RN Breakfast this morning, wheN he said more needs to be done to free the hostages Hamas is holding in Gaza.

We don’t know how many of them are still alive, and their continued release would be essential for any continuing ceasefire because otherwise Israel continues to have a legitimate military objective.

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Housing prices back at record levels, defying Australia’s interest rate rises

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The 7.5% drop from the April 2022 peak has been recovered, but some cities are faring better than others, CoreLogic analysts say

Australian home prices are back at record levels, recovering all of the 7.5% dip from their previous peak in April 2022, according to the data group CoreLogic.

As of Wednesday, Corelogic’s home value index had climbed 8.1% higher than the recent nadir reached at the end of January this year, defying five additional interest rate rises by the Reserve Bank since then.

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Eurozone banks starting to show ‘stress’ as loan defaults rise, ECB warns

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Rising interest rates have boosted profitability but are likely to limit demand and increase risk of bad debts, says central bank

The balance sheets of eurozone banks are showing “early signs of stress” after a rise in loan defaults and late payments by customers, the European Central Bank has warned.

Higher interest rates have boosted banks’ income and profits for the time being, the ECB said, but lenders are facing pressures from higher funding costs, worsening asset quality and lower lending volumes.

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UK savers urged to act quickly for best returns as rates drop

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NS&I, Shawbrook and Tandem among providers to make reductions amid flurry of such moves

Savers have been urged to act quickly if they want to get the best returns on their money after a flurry of interest rate cuts on top-paying accounts.

This week NS&I reduced the rate it offers on its three-year green bonds from 5.7% to 3.95%, while Shawbrook, Tandem and Ford Money were among other providers making cuts.

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Wages grew by 1.3% for Australian workers in the September quarter amid tight labour market

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Wage price index increase in line with expectations as Fair Work minimum wage decision helped pay packets close gap with inflation

Australians’ wages grew in the September quarter as decisions by the Fair Work Commission and a tight labour market helped pay packets close the gap with inflation.

The country’s wage price index rose 1.3% in the quarter alone and 4% compared with the September quarter a year ago, the Australian Bureau of Statistics said on Wednesday.

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‘Call their bluff’: shopping around on home loans can save money – even with high interest rates

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Many mortgage lenders reporting increased competition, meaning savvy borrowers can negotiate for a better deal

In real estate, everything is negotiable, including your mortgage.

While many lenders have withdrawn cashback incentives in recent months, there are still large discrepancies between the best and worst mortgage offers in the market, which means many borrowers are paying too much.

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UK housing market is past its ‘peak pain’, declares Savills

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Upmarket estate agent says prices will start to bottom out in 2024 as interest rates fall and will return to growth in 2025

Britain’s housing market is past “peak pain” and prices look likely to bottom out by next summer, according to the estate agency Savills.

The average UK house price is projected to fall by 3% in 2024, after a 4% drop this year, the upmarket estate agent and property advisory firm said in its five-year outlook.

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The Reserve Bank’s 13th interest rate rise is tightening the squeeze. But a pre-Christmas shock looks unlikely | Peter Hannam

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RBA governor Michele Bullock’s debut rate rise as governor looks unlikely to be repeated next month

Had the Reserve Bank left its cash rate unchanged on Tuesday, a few pundits would have declared “Without a Fight” had won twice within about half an hour.

Instead, a 13th interest rate rise by the Reserve Bank will certainly tighten the squeeze for the half of the mortgagors already nearing the financial stress zone.

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Australia news live: RBA tipped to hike interest rates today; last day of PM’s China visit; Melbourne Cup 2023

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A record level of stressed households are projected as economists tip Melbourne Cup Day interest rate rise. Follow the day’s news live

The government services minister, Bill Shorten, was also asked about the Reserve Bank’s upcoming decision on interest rates later today.

He acknowledged the Reserve Bank is independent of the government but said “I hope it stays static”:

[I] just know a lot of mortgage holders are doing it tough, but the bank will make its decision independently.

For the Albanese government, we know that inflation is a cost of living issue. We have put in a whole heap of measures from childcare to parental leave and energy support. People are doing it tough at the moment, I think it’s hard out there.

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Don’t get caught out by tax on cash interest, UK savers told

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Higher interest rates and move away from cash isas means hundreds of thousands more people may be hit

Higher interest rates look set to land hundreds of thousands more people with an unwelcome tax bill for their savings, a financial advice firm warned this week.

A couple of years ago it was typically only the wealthiest with very big nest eggs who had to pay tax on their savings interest – but now someone with an emergency savings pot of about £8,000 could find themselves falling foul of this little-known tax trap.

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Record property prices in multiple Australian cities with Sydney up 7.5% in past year

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Economists say limited sales volumes and rising populations have more than made up for the dampening effect of higher interest rates

Australia’s property prices have soared to record levels in several capital cities as limited sales volumes and rising populations more than made up for the dampening effect of higher interest rates, two data groups say.

The new figures show significant growth in Brisbane, Adelaide, and in Perth, where five areas have recorded annual gains of more than 15%, while prices in Sydney are 7.51% higher than a year ago.

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Higher interest rates help HSBC to more than double profits

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Bank criticised by MPs for being too slow to reward savers as it announces 15% rise in net interest income and $3bn share buyback

Higher interest rates helped HSBC to more than double its profits and hand over $3bn (£2.5bn) to shareholders, as MPs criticised the largest UK banks for being too slow to reward savers.

The London-headquartered bank said it was launching a share buyback, and paying a dividend worth 10 cents a share, after what its chief executive, Noel Quinn, hailed as “three consecutive quarters of strong financial performance”.

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UK house prices will not stop falling until 2025, Lloyds predicts

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Britain’s biggest mortgage lender forecasts 5% drop over this year and another 2.4% decline in 2024

UK house prices will continue to slide this year and in 2024 and will not start to recover until 2025, Lloyds Banking Group has forecast.

The lender, which owns Halifax and is Britain’s largest mortgage provider, said that by the end of 2023 UK house prices would have fallen 5% over the course of the year and were likely to decrease by another 2.4% in 2024.

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Grim end to year predicted for Labor with high chance of at least two more interest rate rises

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Strong quarterly inflation figures sends market scrambling as odds on for interest rate hike at Reserve Bank’s Melbourne Cup Day meeting

The Albanese government looks set for a dismal end to 2023 with the looming prospect of two Reserve Bank interest rate rises, compounding the disappointment of the failed voice referendum.

Wednesday’s surprisingly strong September quarter inflation figures prompted many economists to jettison views that official interest rates had peaked. Investors now price the odds of another quarter-point RBA hike to 4.35% on 7 November at 80%, doubling in a day, according to Bloomberg.

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Petrol prices spiked 7% in September quarter and there’s more pain to come, Australian treasurer suggests

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Costs could rise as conflict between Israel and Hamas in the Middle East worsens, Jim Chalmers warns

Australians are feeling the impact of inflation at the petrol pump with the latest data expected to show fuel prices rose by more than 7% in the three months to the end of September.

Treasury estimates the latest consumer price index data for the September quarter, to be released on Wednesday, will reveal the soaring cost of petrol brought on by global factors including the war in Ukraine, supply constraints and the weaker Australian dollar.

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