Interest rates rise for third successive time to 3.75 percent
December 1, 2009
Interest rates will rise to 3.75 percent tomorrow after the Reserve Bank agreed to raise them by 25 basis points for the third time in a row.
At its meeting in Sydney today, RBA Governor Glenn Stevens says the decision was made on the basis the global economy was growing and will continue to improve.
“With economic policies remaining expansionary, growth is likely to continue next year, though it will probably be modest in the major countries, due to the continuing legacy of the financial crisis,” Stevens says.
“In China and Asia generally, where financial sectors are not impaired, recovery has been much quicker to date and prospects appear to be for good growth in 2010.
“Financial markets have improved considerably during 2009, notwithstanding periodic setbacks, and capital flows into Asia and other emerging market regions have been picking up.”
Unions had earlier today called for rates to remain as they were, saying an increase would put further pressure on Australian families who are struggling under financial pressure.
“A third successive rate rise could halt emerging signs of an economic recovery and put jobs at risk by increasing borrowing costs for small businesses,” ACTU President Sharon Burrow says.
She says unemployment is at its highest level since 2002 and another 100,000 Australians are expected to lose their jobs by the end of the year.
Burrows says the RBA should not increase rates until it receives evidence on how previous increases have impacted the economy.