Signs of more interest rate rises to come

A resilient economy, broadening inflation and signs of solid wages growth pushed the Reserve Bank to raise rates in May, with strong signals of more rises to come.

KPMG expects the cash rate to finish the year at around 1.25 percent and then reach 1.75 to 2 percent by mid-2023. The strength of the domestic economy was also highlighted in the March retail data. Spending was up 1.6 percent on the month, and even factoring in inflation, growth momentum remains strong. But headwinds are looming, and given falling real wages and interest rate rises, it’s clear that discretionary spending, such as hospitality, are most at risk from any slowdown. The Reser...

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Authors: Brendan Rynne, Sarah Hunter

Published Date: 09 May 2022