RBA begins meeting to decide interest rates

Scott, welcome. We've had so many economic figures recently released that could influence the Rba's decision. So what will the board members actually be taking to an account and and why is that? Davina, good afternoon. Yeah, it is going to be a fascinating meeting. To be a family on the wall would be lovely. On the downside, we know inflation is too high and rising rather than falling. At the last meeting, the RBA said it was already outside its preferred range. On top of that, we also know retail sales are slowing and GDP is flat. Economic output, the stuff we make and do. Growing at only 0.1%. The one shining light economically is employment. Unemployment remains low at only 4%. Very, very good news for those who otherwise would be without work. How bad is it out there at the moment for borrowers right now? Because we heard so much at the start of the year about talk of this mortgage Cliff. Where are we with that? Are we hanging on? Are people having to sell? We are hanging on, which is the best news. There are some people still on those fixed rates. They will continue to roll over probably over the next six months or so. By the end of this year, we should be pretty much done. Some of them have got 1.99%. Feels like a lifetime ago. They will almost certainly be finished by the end of this calendar year. Most people are managing arrears, That is, people who aren't up to date with their mortgage repayments is ticking up very slightly. The saving grace is unemployment. As I mentioned before, you can pretty much put up with anything and get the mortgage paid as long as you've kept your job. Tough economic circumstances. The RBA has some very serious thinking to do and add it all into this next month. Tax cuts for every Australian, they start to kick in. The Treasurer insists this won't be inflationary. What do you reckon? I reckon the treasurer is. You guys get some wishful thinking, Davina. Will inflation necessarily rise on the back of it? Not if inflation was already going to fall. Politicians use those weasel words, putting upward pressure to try and avoid making predictions. This time around though, I think those words apply. Inflation would be lower without these tax cuts. It's almost has to be the case, $10 billion plus going into the economy. We know from, you know, year 8 commerce, If you have more money chasing the same number of goods, it must put upward pressure on prices. Michelle Bullock still not ruling out a rise in the months to come. What's your prediction? Look, I don't do predictions. I have to say, Davina, this is this is made to make people look mean, like silly. What we can do is look at the circumstances and imagine what might be coming next. If we get a rate cut, it'll actually be, if we get one soon, it'll be because the country's struggling rather than doing particularly well. In other words, if it becomes an emergency outcome from the RBA, that's going to be a bad sign. So we want rate cuts. I think everyone watching the mortgage, even paying rent, wants things to be a little bit easier on the property front. That would be great news for all of us. But we want it to come in an orderly fashion because inflation is doing well. Not because the economy's collapsed. See what happens tomorrow. Scott, thanks so much.