John Symond is right, the banks have already put the rate rise in and so any further rises would compound mortgage holder problems, e.g. would reduce their disposable income, etc. Of course it wold also further compound housing affordability!
Also, the "arbitrary" selection of 3.5% inflation is a joke considering the market conditions that have prevailed over the last 6 months.
Finally, with a booming resources sector and the flow-on from all this cash, including superannuation $$$ being pumped into all kinds of things, it is clear that the old economic model is due for a refresh - and a rethink!
Actually one more point, are bananas still part of the CPI calculation? If so Paul Keating was right! If so they've gone down 50% (at least down here in Mlebourne), so will the RBA factor that in too? What a joke.
Oh yes, two more things, 1) If crude rises in cost and adds to inflation, then the government can reduce the excise on petrol and so reduce the CPI and hence inflation and 2) If mortgage costs ar included in the CPI and hence ultimately inflation, then isn't it a self forefilling prophecy, i.e. inflation goes up if interest rates go up?
