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Aussie Shares Drop Ahead of Interest Rates Decision
Markets priced in an 87% chance of a Melbourne Cup rate hike as inflation stayed above the RBA’s target and mortgage pressure mounted.
- On Wednesday, October 28, the Australian Bureau of Statistics reported annual headline inflation rose to 4.3% in September, cementing market expectations for a fifth interest rate hike by the Reserve Bank of Australia on November 3.
- High fuel costs, which jumped 9.4% in September, alongside a 5.2% annual rise in housing costs, drove the headline inflation increase; Treasurer Jim Chalmers emphasized that global pressures and private sector demand remain the primary drivers.
- Reserve Bank officials told a Senate Estimates hearing the figures were broadly expected but remain 'too high', while financial markets reacted immediately with the probability of a rate hike surging to 87 per cent.
- Property values fell for the seventh consecutive month, declining 1.2% in October as rising interest rates eroded borrowing capacity, with property consultancy Cotality reporting national dwelling values down 6.7% since their March peak.
- Amid persistent inflation risks, Governor Michele Bullock identified weak productivity growth as a 'fundamental challenge', and economists project interest rates may need to remain elevated well into 2027 to curb price pressures effectively.
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‘Inflation nation’: Aussies brace for fifth rate hike
The Albanese government has been urged to rein in its spending and pull every leaver to create “household budget breathing room” as families and small business owners braced themselves ahead of a likely interest rate hike on Tuesday – the fifth this year.
·Southbank, Australia
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Coverage Details
Total News Sources46
Leaning Left7Leaning Right5Center10Last UpdatedBias Distribution45% Center
Bias Distribution
- 45% of the sources are Center
45% Center
L 32%
C 45%
R 23%
Factuality
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