Markets had priced in a fifth rate rise this year, which would take the cash rate to 4.85 percent, its highest in 18 years.
“The impact of another rate rise on the New South Wales economy will be massive,” Minns said. “There will be jobs lost that never come back and shops that close and do not reopen with another rate rise.” He called the RBA decision “a very tough call” and urged federal and state governments to rein in spending.
Union and welfare groups react
ACTU secretary Melissa Donnelly said workers “cannot survive another interest rate rise,” and argued the inflation crisis was caused by “Trump’s war in the Middle East.” Australian Council of Social Service chief executive Cassandra Goldie said “higher interest rates create unemployment by design,” and warned that an increase towards or above 5 percent would be disastrous.
Inflation peaked near 8 percent in late 2022 before falling back within the RBA’s target band ahead of the 2025 election. The government has pointed to international factors, including the war in Iran, as drivers of price pressure. A mid-year budget update due next month is expected to include a savings package.
Political fallout sharpens
Opposition leader Angus Taylor blamed the government’s fiscal management, saying the “Labor government can’t control its spending, so the Reserve Bank needs to do all the hard work.” A Newspoll showed Labor’s primary vote at 27 percent, One Nation at 28 percent and the Coalition at 21 percent.
The Australian dollar stood at $0.7019 against the US dollar as of 06:23 GMT on 2 November. The RBA’s decision on Tuesday will determine whether the anticipated fifth rate rise of the year goes ahead.
Data: Swissquote
