Consumer price inflation rose by 1.8% in the June quarter, and by 6.1% on a rolling 12-month view. Whilst high, these measures were below consensus expectations. In turn, this prompted hopes that local interest rates might not need to increase as much as previously feared.
Australia has a high level of household debt, with a large- proportion of borrowers on variable-rate mortgages. Rate hikes can therefore be
particularly painful for Australians.
Policymakers therefore have a challenging task, balancing the need to dampen inflation through tighter monetary policy settings, without
strangling growth by crippling homeowners with sharply rising mortgage re- payment costs.
The Reserve Bank of Australia raised rates again on 1 November, by a further 0.25 percentage points. Official interest rates are now
2.85% and may be raised again in December.
A rally in the second half of the month helped global share markets generate solid gains in January, extending the rally from November and December.
Recent research shows why giving to others can provide us with a mental boost. We feel happier when we have a choice in how and who we give, and when we see the results of our generosity.
Investment markets have shown a lot of enthusiasm for AI and Chat GPT technology. AI productivity gains could boost economic growth and
share market performance across the world.