RBA hikes rates; Westpac sold-off; EV sales surge
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Welcome to Fear and Greed, business news you can use. Today, the Reserve Bank lifts interest rates and hints there could be another hike later in the year. Westpac announced a solid profit for the last half year and sales of electric vehicles surge. Plus, Qantas' CEO upbeat about the outlook for the national carrier. And luxury retailer LVMH looks to offload brands. It's Wednesday, the 6th of May, 2026. I'm Juliette Sali, and good morning, Sean Alma.
Good morning, Juliet.
Well, of course, the main story this morning, Sean, the Reserve Bank of Australia lifting the official cash rate yesterday afternoon in a bid to rein in inflation and also making it clear that it isn't just the Middle East conflict pushing up prices, but also capacity pressures in the domestic economy.
Why did the RBA decide to hike interest rates?
Now, on what was supposed to be a tight run call, eight of the nine members of the RBA Monetary Policy Board actually voted for a rate hike, which was the third this year. It takes the official cash rate back to where it was in late 2024 and it's almost 15 years since the official cash rate has actually been any higher than where it is now.
Yes, I don't like thinking of it that way. It means a mortgage of $600,000 or thereabouts will cost homeowners an extra $90 a month, the three rate hikes this year, plus higher petrol prices add close to $500 a month to household bills. And that, of course, is before food inflation kicks in. There really wasn't much good news from the central bank. It said there are plausible scenarios where inflation is higher and growth is lower than envisaged. Governor Michelle Bullock acknowledged that government spending, which presumably is state and federal, is making the central bank's job harder. And I quote her, End quote. Bullock also said that the RBA was making a judgment call on the strength of the consumer in the economy and monetary policy is now restrictive.
And it might be the wrong call, she said. That would have the potential of tipping the economy into a recession, but it is the Reserve Bank's best guess.
Yeah, I was actually at the press conference yesterday and you're right, there wasn't much good news. You can tell that she is worried about the effects of these higher rates on Aussies who are struggling, but she continued to say, look, this is the only tool they have, whether or not it's a blunt instrument or not. And the RBA noting that there are some early signs that businesses are experiencing cost pressures and They're looking to increase prices, which we've touched on already this week. And short-term measures of inflation expectations have also risen. So kind of setting the stage up, I guess, for the fact that rates could be hiked again. And that's what we're sort of seeing with a lot of these forecasts coming through from economists in the wake of this decision too.
Yeah, I must have asked, Julie. So you were there in your capacity at Ausbiz. If you're interested, ausbiz.com.au, jump on board. What's it like?
It's really fun, actually. It's sort of, I guess, a, you know, group of gathering of all the financial journalists. We don't see each other very often. And I think I mentioned to you the other day, we have absolutely no idea how they decide who sits where. I used to think it was about who registered first. Now I have no idea. But basically you enter the room and there's normally, I think about 16 to 20 seats for the media and they're really good in giving everyone a question although she does indicate you should only ask one question some people like to do a follow-up and they basically just go in order so you end up sitting you know in a different spot i was number 10 yesterday i have been lucky enough to be number one in the past but i've also been number 20 which is not fun when you've got to think of a question she hasn't already been asked you know 17 times are you allowed to say oh look someone else has asked my question i'm out not really
Well, you could, but I guess you're there to try and, you know, give your voice and your platform, you know, a bit of a shout out as well.
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