CommSec’s Chief Economist Craig James says the economy needs time to absorb interest rate rises and respond to them, as the Reserve Bank of Australia is predicted to increase the cash rate by another 50 basis points tomorrow.
“It takes some time for the full effects of the interest rate hikes to slow down the economy,” he told Englishheadline Australia.
He said Australia’s economy is in “fundamentally great shape” and is “by no means anywhere near where the other parts of the world” are when it comes to inflation.
“Europe has got an inflation rate of 10 per cent, UK around about 10 per cent. Our underlying sort of rate is nowhere near that, it’s closer to five per cent.”