Unemployment to rise as interest rates set to climb again
Treasurer Chalmers warns higher interest rates will mean softer growth and slightly higher unemployment.
Treasurer Jim Chalmers has warned that Australia faces softer economic growth and rising joblessness as the Reserve Bank prepares another interest rate increase. The sharemarket is pricing a 62 per cent chance the RBA will hike rates on Melbourne Cup day in November, which would be the fifth hike this year.
Chalmers said Treasury is revising its forecasts downward because higher interest rates and inflation will squeeze households and business. Chalmers blamed global pressures: two wars in Ukraine and Iran, the biggest economies carrying more debt, and heavy spending on artificial intelligence are pushing up borrowing costs worldwide.
Despite warnings, he noted Australia is growing faster than almost every wealthy nation and private sector activity is picking up while the government has eased its spending.
- 62 per cent
- Rate hike probability
- Melbourne Cup day November
- Likely timing
- Fifth
- Hikes this year
Why it mattersAustralians on mortgages face higher loan repayments; job seekers may find fewer positions available; household budgets will tighten further.
AustraliaHigher unemployment and slower growth directly affect Australian wages, hiring and household spending. Mortgage holders will pay more when rates climb.
✓ Claims checked against the source and corrected before publish. checked 2 h ago
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