| Rudd puts banks on notice as rate rise looms |
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February 2, 2010 Prime Minister Kevin Rudd says family budgets will be hurt if the Reserve Bank decides to increase interest rates when it meets today. The Reserve Bank has been widely tipped to raise the cash rate by 25 basis points to 4 per cent when the board meets this afternoon. Return to this website at 2.30pm to find out whether the RBA moved on rates - and by how much Markets are pricing in a 71 per cent chance of a quarter-percentage-point rate rise - and that rates will be almost a full percentage point, or 92 basis points, higher by this time next year. If rates rise as expected, it would be the fourth consecutive rate rise by the central bank. In December, the official cash rate jumped 25 basis points to 3.75 per cent - but some banks increased standard variable rates by much more. Westpac prompted a public outcry when its variable rate jumped 45 basis points, almost double the increase instituted by the RBA. "Let's face facts, any increase in interest rates has an effect and hurts working families, that's the truth of it," Mr Rudd told the Nine Network this morning. But Mr Rudd said commercial banks had a responsibility to customers. He urged banks to follow a decision by the National Australia Bank, announced on the weekend, to keep interest rate adjustments within any official rate rise. "Don't underestimate the impact of the public's attitude to these things," Mr Rudd said. "I think it would be the right thing to do for the other banks to follow suit." Mr Rudd said the public also needed to keep in mind interest rates had been at near record lows over the past year because of the global recession.
(Source from The Sydney Morning Herald.com.au) |
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