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Rates rise: industry apprehensive and disappointed.



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Media Release  

5 April 2000

Rates rise: Industry apprehensive and disappointed

Industry views today's rate rise with disappointment and apprehension.

Today's rise means that interest rates have now risen a full percentage point over the past five months. The increases to date have had a marked effect on industry confidence and activity and this negative impact will continue to cut in over the months ahead. Today's rise adds to this pressure.

As the Bank has acknowledged, 'there is no evidence of widespread overheating in the Australian economy'. This is particularly so in the industrial sector, as Ai Group's surveys of both manufacturing and construction clearly show.

This rise acknowledges the changing balance of risks facing the Australian economy. It sends a sobering signal that we must continue to resist the temptation to seek higher than affordable wage increases; it underlines the concern over inordinate new economy speculation; and it underlines our external vulnerability.

Today's rise marks a further shift towards a neutral monetary stance. A contractionary monetary policy is far from warranted. Continued uncertainty over interest rates can only further damage confidence. It should mark the end of the increases for the foreseeable future.

Contacts: Bob Herbert Chief Executive

0419 301 764

  Heather Ridout

Executive Director - Public Policy & Communications

0419 257 361

  Louise Patroni

Senior Advisor - Media and Policy 02 9466 5503 or 0418 420 917

 

Contacts : Bob Herbert Chief Executive 0419 301 764 Heather Ridout Executive Director - Public Policy and Communications 0419 257 361 Louise Patroni Senior Adviser - Media and Policy 02 9466 5503 or 0418 420 917