Today's papers has reported that inflation is predominant across the board of items in the CPI (Consumer Price Index). This would not be a good sign for the RBA as one of their main objective is to target inflation and keep it at a certain band. If I am not mistaken, it would be 2%-3%.
This might affect their next decision to raise interest rates. It is to be seen whether the RBA believes that the rise in inflation is big enough to force a rise in interest rates to slow the growth of money supply.
However, there are some other factors to bear in mind before taking that step. For instance, would that rise in interest rates affect a huge percentage of population who are already finding it impossible to repay their mortgages.
This might affect their next decision to raise interest rates. It is to be seen whether the RBA believes that the rise in inflation is big enough to force a rise in interest rates to slow the growth of money supply.
However, there are some other factors to bear in mind before taking that step. For instance, would that rise in interest rates affect a huge percentage of population who are already finding it impossible to repay their mortgages.
