November Observations

Interest Rate Rise

The RBA raised rates to 2.85% on Melbourne Cup Day. Anyone on variable would be feeling the raises with a lot of rates going from having a 2 in front of them to a 5. This is no doubt putting pressure on surplus cash and disposable incomes. Differing views on where rates will head but consensus seems to be around 3.9% – 4.4% which implies quite a bit more in terms of interest rates. The RBA seems to be adopting .25 basis point increments to wait and see the effects of the rises which normally take about a year or longer to be felt. Right now, it is a balancing act of taming inflation versus putting too much stress on borrowers. Good news is that it is expected to ease off towards next year however how much damage is done before then is yet to be seen. See notes below on Inflation and Refinancing.

Inflation Outlook

Inflation came in at an annual pace of 7.3% in September. Well above expectations of 7%. It is forecast to peak by the RBA at 7.75% in the December quarter. Getting this to the target band of 2-3% is the goal of the RBA but as mentioned, balancing this with keeping the economy moving is the challenge. A lot of the input price pressures are coming from external factors such as the Ukraine conflict effecting energy and wheat prices, lockdowns in China and the world moving to a more nationalistic approach rather than relying on the global economy. So, whilst interest rate rises will hurt consumption, the external macro factors are still there.


Refinancing is at a record as borrowings look to find cheaper rates. Most variable loans appear to have lower comparable rates meaning a call to your lender or speaking to a broker is a good idea.


There are rumours that China may reduce its elimination fight against COVID which is being felt around the world. This is a key factor in taming inflation.


As per our budget update, visa processing appears to have been boosted. This should hopefully support the local jobs market which is crying out for talent and competition.

Upcoming Lodgements Dates for November:

  • 21 November – Monthly IAS for Employee Wages
  • 28 November – Quarterly BAS due for clients lodging electronically