AFR readers temper spending as rates bite
Readers of The Australian Financial Review are tempering their discretionary spending as interest rates and the rising costs of essentials, such as groceries and petrol, sting wallets.
Australians are feeling the combined pinch of inflation and the Reserve Bank of Australia’s efforts to bring it in line with a surge in the cash rate. The RBA has lifted the official interest rate from 0.1 per cent in April last year to 4.1 per cent in June where it has stayed on hold.
Households are tapping savings accounts as surging oil prices and angst about higher mortgage costs take hold. New RBA governor Michele Bullock chairs her first monetary policy this week as motorists were told last week to not expect any relief from the record $2 per litre prices at the petrol pump.
Petrol prices have been higher than $2 a litre for weeks. Dion Georgoloulos
A poll of more than 500 Financial Review readers showed 61 per cent had moderated their discretionary spending in the past few months, compared with 37 per cent who had not.
Readers were split on whether they supported further interest rate rises to bring down inflation.
“Like the man said, if all you have is a hammer then every problem is a nail. Inflation won’t be quelled by further rate rises, at least not without significant disruption and pain,” one reader said.
“Everyone I know has looked at their discretionary spending, but the non-discretionary items are not going down (I’m thinking groceries, petrol, housing costs for example).”
The reader urged government to look at the issues of corporate profits, how short-stay housing was distorting the housing market and supply-side issues pushing inflation.
Nearly three-quarters of readers said controversies at Qantas had made it more
Read more on afr.com
