PM not worried about potential interest rate rise

Scott Morrison has insisted he’s not worried about the prospect of an interest rate rise next week during the election campaign, maintaining it’s a matter for the Reserve Bank.
Traditionally, the RBA rarely hikes rates during election campaigns because it doesn’t want the issue to become a political football and it wants to remain independent.
If the RBA chooses to hike rates it will be the first time that has happened during a federal election campaign since 2007 when Kevin Rudd defeated John Howard after 11-years of Coalition government.
But with inflation surging, the RBA could face questions about why it hasn’t increased rates if it holds firm next week.
The issue was discussed this morning during the Prime Minister’s interview with Channel 7’s Sunrise program.
“The Reserve Bank rarely increases rates in the election campaign, because it doesn’t want to be seen to be political,’’ Sunrise host David Koch said today.
“Would it worry you at all if they didn’t move rates up next week, as they should, to get ahead of this issue to keep inflation subdued?”
“Well, as you know, David, I’ve never been a commentator on what the Reserve Bank should do, particularly from the time I was Treasurer. That would be irresponsible,’’ Mr Morrison said.
“But if they did during an election campaign, would that worry you at all? Should they be completely independent,’’ the Sunrise host then interjected.
“I respect the independence of the Reserve Bank. Always have, always have. And they need to make the judgments they need to make in the best interests of the Australian economy. And I have no doubt they will do that.
“And there’s a big difference, though, between what occurred back in 2007 and what’s where we are now. Last time the Reserve Bank did that, the rate was 6.5 per cent. Today it’s 0.1 per cent. And so I think the circumstances of the economic environment we’re in now is very different and the pressures that are coming are not homegrown. They are external.

“But the way to deal with it is ensuring that we take strong economic management, which is bettering the rest of the Western world, whether it’s on unemployment or whether it’s on the growth of jobs I should say, whether it’s getting our electricity prices down by 8 per cent, over 9 per cent down since I first became Prime Minister.
“Ensuring we’re keeping that AAA credit rating. We have been a steady hand during the most immense pressures on our economy and it’s paying dividends, but it’s still tough. So now is not the time to risk it on Labor.”

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