On 2nd November to RBA decided to raise the cash rate by 0.25% to 4.75%. This is the seventh rate increase since October 2009, when the cash rate was at 30 year lows and continues the RBA’s perception that there remains inflationary pressures in the Australian economy.
Without doubt, it caught almost everyone by surprise as data released in the days prior led most economists to predict that rates would remain on hold. Adding further negative sentiment to the rate increase was the CBA’s decision to increase rates by an additional 0.20% with the other major banks certain to add an additional premium to their own increases.
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