THE SQUIZ

The Reserve Bank of Australia (RBA) board will meet today to discuss whether it will raise interest rates for the final time this year. The consensus expert view is the central bank will raise the cash rate by another 25 basis points (aka 0.25%), taking the official rate to 3.1%. And as anyone with a mortgage probably knows, if it goes ahead, it would be the 8th consecutive month we’ve seen a jump. So set your watch to interest rate o’clock (aka 2.30pm AEDT on the first Tuesday of the month)…

HOW MUCH HIGHER WILL THEY GO?

Good question. If the RBA raises rates to 3.1% today, it’s still short of the 3.6% peak rate, which has been forecast by economists to curb inflation… As for when that might happen, there’s debate between economists about whether we’ll see it in early 2023 or if the RBA will hit pause for a while. Remember, rates are going up in order to bring inflation down… And this month’s meeting comes a week after October’s inflation rate was reported at 6.9%, down from 7.3% in September. One month’s worth of data doesn’t make a trend, but that drop has fuelled speculation that inflation has begun to slow, which could, in turn, see the RBA pump the brakes on interest rate hikes. Regardless, after today, the RBA board isn’t due to meet until February, providing boss Philip Lowe some recovery time after apologising last week for giving borrowers an incorrect steer about the timing of rate rises…

SO WE’RE NOT IN FOR A VERY MERRY CHRISTMAS?

Well… not quite. As we’ve touched on before, despite the cost of living pressures, Aussies were expected to spend a record $6.2 billion in the Black Friday and Cyber Monday sales a week ago. Although the final sales figures haven’t been released by retailers yet, early signs from the National Australia Bank say we might have beaten those predictions with a $7.1 billion spend. That lines up with a report from the Australian Retailers Association yesterday, bumping up projections of how much we’ll spend in the lead-up to Christmas. It forecasts a record $66 billion will be spent in total, up 6.4% on last year. Boss Paul Zahra says that figure is due mainly to price increases and Aussies’ uncontainable desire to get out to bars and restaurants to socialise IRL post-COVID. “Aussies truly plan to eat, drink and be merry this Christmas,” he says. Cheers to that – just go easy on the plastic money…