SYDNEY - Australia's central bank lifted interest rates on Tuesday for the first time in 12 years - a move that instantly reshaped the federal election and dealt a blow to Prime Minister Scott Morrison, whoFacing spiralling inflation, the Reserve Bank of Australia raised the nation's record low interest rates of 0.1 per cent to 0.35 per cent.
"The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time," Dr Lowe said in a statement.But the interest rate hike comes at a perilous time for the ruling Liberal-National Coalition, which has campaigned on its economic credentials. Labor's shadow treasurer, Dr Jim Chalmers, accused Mr Morrison of causing a"full-blown cost-of-living crisis".
Australia's economy has recovered strongly since the onset of the pandemic, when it experienced its first recession in almost 30 years. The unemployment rate is 4 per cent - the lowest level in 48 years - and wages have begun to rise. Opinion polls this week showed Labor continues to hold a strong lead over the Coalition and is on track to win the election on May 21.
Melbourne home owner Alan Maassen told ABC News on Tuesday he had an A$700,000 mortgage and was deeply concerned about the prospect of interest rates rising to 2 per cent or more."Is it just a matter of time before I can't afford to own my own home?" he asked.
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