Rate rises useless? 10-41 5th March 2008

Interest rates have been raised by another 0.25 percent—not exactly a big surprise. But are all of these rises actually helping Australia control inflation? Harry Triguboff, Meriton Group managing director writes ‘no’ in a Sydney Morning Herald article.  

"The mavens at the Reserve Bank have decided that inflation should be two to three percent and everything will be all right," he says. "If life was really this simple, we wouldn't even need a Reserve Bank; we could just program a computer to fix our interest rates.

"Or probably train a monkey."

Triguboff believes rising oil and food prices, as well demands by the Chinese middle class for higher wages, are driving inflation. "Nothing the Reserve Bank does here will have any effect on those impacts that reach us from overseas.

"Food and petrol prices will continue to go up, because of their scarcity, all around the world."