Australian authorities increase interest rates yet again
At a time when the UK government is adamant that UK base rates will remain at around 0.5% for the foreseeable future we have today learnt that the Reserve Bank of Australia has pushed through another 0.25% base rate increase with the Australian rate now up to 4.25%. So why have the Australian authorities pushed through yet another rate rise?
This is the fifth rate rise since October and brings Australian base rates back up to more traditional levels. A look back at the performance of the Australian economy shows that it was one of the first to leave the worldwide recession and indeed has proved to be one of the strongest economies in recent times. Compared to the UK, where many are still unconvinced that the recession is over, the prospects for Australia are far more positive and far more upbeat. But have the Australian authorities moved too quickly?
Despite the fact that the Australian economy, and the property market in particular, has shown significant growth in the short term there is some concern that higher base rates could weaken the recovery. Time will tell with regards to this issue but the comparisons between the Australian economy and the UK economy could not be further apart!
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