Treasurer Jim Chalmers has used the Reserve Bank’s shock resumption of interest rate rises to warn that fighting Australia’s 7 per cent inflation rate must come ahead of demands to increase welfare spending in next week’s budget.
“This is a reminder that inflation remains the primary challenge in our economy,” Dr Chalmers said after Reserve Bank governor Philip Lowe announced a surprise increase in the cash rate to 3.85 per cent.
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Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS. Connect with Michael on Twitter. Email Michael at michael.read@afr.com
Phillip Coorey is the political editor based in Canberra. He is a two-time winner of the Paul Lyneham award for press gallery excellence. Connect with Phillip on Facebook and Twitter. Email Phillip at pcoorey@afr.com
