The Wire

The Reserve Bank Board met today, to discuss a possible interest rate rise in the hope of reigning in increasing inflation. The announcement will come tomorrow, with a rise in rates widely expected. But this isn’t a routine adjustment, the reserve bank finds itself in a conflicting position – control inflation, or encourage growth…. Australia’s unemployment is currently at a 28 year low, and credit growth is at historically high levels. But in comparison, crucial housing and retail sectors have slowed and consumer confidence took the biggest hit on record last month. In a statement released today, the federal opposition has argued that the Reserve bank has been pushed into a corner and will have to increase rates as a result of the Howard Government 66 billion dollar election spending spree. So how will the average Australian home and small-business owner react to a decision by the Reserve Bank to control inflation rather than protect growth? Frank Stilwell, Professor of Political Economy at the University of Sydney, is a well known critic of conventional economics and an advocate of alternative economic strategies. He spoke to The Wire’s Anja Kueppers about how an interest rate rise will affect Australians’ moral, and the economy.