In an unprecedented move, the Reserve Bank of Australia announced the first interest rate hike in more than a decade, dealing a major blow to Australian homeowners.
The RBA said on Tuesday afternoon that Australia’s official cash rate would be raised by 25 basis points to 0.35 percent from 0.1 percent.
While a rate hike was widely expected, most experts forecast a much smaller 15-basis-point increase.
It is the first rate rise in 11 years – since November 2010 – and is a desperate attempt to clamp down on skyrocketing inflation, which has reached an annual rate of 5.1 per cent and has sent prices climbing at the fastest rate in two decades.
It is also the first rate rise during an election campaign since 2007, when John Howard lost out to Kevin Rudd, and the ALP wasted no time in sticking the boot into the Prime Minister.
“It was hard enough to make ends meet under Scott Morrison and today it got even harder for millions of Australians,” Shadow Treasurer Jim Chalmers said in a joint press release.
“Even before today’s decision Australians were facing a full-blown costs of living crisis on his watch.
“Scott Morrison’s economic credibility was already in tatters, now it’s completely shredded.”