An early Christmas present for mortgage holders as rates hold steady
The RBA board cited the impact of last month’s rate rise as a determining factor in the decision
2 min
Interest rates will remain at 4.35 percent following a meeting of the Reserve Bank of Australia board today. The decision by the board, which was widely predicted by economists, follows on from the November meeting where rates rose by 0.25 percent, the first rise in four months.
Governor Michele Bullock said last month’s rise was designed to accelerate the decline in inflation which the board considered to be happening at a slower pace than required.
“This decision reflected the Board’s view that progress in bringing inflation back to the target range of 2 to 3 percent was looking slower than earlier forecast,” Ms Bullock said. “While the economy has been experiencing a period of below-trend growth, it was stronger than expected over the first half of the year.”
The increase in the cash rate had been an effective tool in moderating inflationary pressures, she said.
“Higher interest rates are working to establish a more sustainable balance between aggregate supply and demand in the economy,” Ms Bullock said. “The impact of the more recent rate rises, including last month’s, will continue to flow through the economy.
“High inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment. Holding the cash rate steady at this meeting will allow time to assess the impact of the increases in interest rates on demand, inflation and the labour market.”
Head of research at CoreLogic Australia Eliza Owen said last month’s rise had already impacted on the property market, with November property values recording their smallest increase since February at 0.6 percent.
“Recent market performance indicates that while housing has been surprisingly resilient this year in terms of capital gains, interest rate increases have had some impact,” Ms Owen said. “This is particularly the case where rate increases were unexpected. This was evident following the ‘surprise’ rate hike through June, and appears to have had some impact through November.”
While the RBA board will not meet again until February 2024, Ms Bullock would not rule out further rises in the new year.
“Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks,” she said in a statement. “In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market.
“The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.”
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Quantum computing is moving from theory to real-world investment. Professor David Reilly says it could reshape finance, security and global technology infrastructure.
3 min
For decades, the world’s computing power has quietly expanded at an astonishing pace.
From the first transistor developed at Bell Labs in 1947 to modern processors containing billions and even trillions of transistors, each generation of technology has been faster, smaller and more powerful than the last.
But according to quantum physicist and technology entrepreneur David Reilly, that era of effortless progress is beginning to slow.
Reilly, CEO of Sydney-based Emergence Quantum and Professor of Physics at the University of Sydney, says the computing infrastructure underpinning modern economies is approaching fundamental physical limits.
And that could have enormous implications for finance, artificial intelligence and global investment.
Speaking at an industry event organised by Kanebridge International, Reilly said many critical parts of modern society depend on computing and the infrastructure used to process information.
The slowdown behind the tech boom
For years, the technology industry relied on a steady improvement known as Moore’s Law, where the number of transistors on a chip doubled roughly every two years.
More transistors meant more computing power, allowing faster software, smarter devices and ever-larger data systems.
Today, however, those gains are slowing.
“It feels to me very innate that I’m going to just find that next year there’s going to be another breakthrough,” Reilly said.
“But if you look at the data…there’s a slowing down, a roll off in performance that started some 10, 20 years ago.”
Rather than making chips dramatically faster, manufacturers are now largely increasing computing capacity by packing more transistors onto each processor.
The approach works, but it comes with growing complexity, higher costs and increasing energy demands.
The brute-force race for AI
That challenge is already visible in the massive data centres being built to support artificial intelligence.
In the race to dominate AI, companies are constructing vast computing facilities that consume huge amounts of electricity and water. Reilly described this expansion as a “brute force” approach driven by the global competition to develop advanced AI systems.
Yet the demand for computing power continues to accelerate.
Artificial intelligence, advanced robotics, healthcare research, pharmaceuticals and cybersecurity all require far more processing capacity than today’s systems can easily deliver.
The question now facing the technology sector is whether traditional computing can keep up.
Enter quantum computing
That is where quantum computing enters the conversation.
Unlike conventional computers, which process information using binary switches that represent ones and zeros, quantum computers exploit the unusual behaviour of particles at the atomic scale.
Reilly describes them as a fundamentally different type of machine.
“So a quantum computer is a wave computer,” he said.
Instead of processing information through simple on-off switches, quantum systems can use wave-like properties of particles to process many possible outcomes simultaneously.
Those waves can interact in complex ways, reinforcing correct solutions while cancelling out incorrect ones. In theory, this allows quantum systems to tackle certain types of problems dramatically faster than classical computers.
What it could mean for finance
The concept may sound abstract, but its potential applications are significant.
Quantum computers are expected to transform areas such as materials science, chemical modelling and pharmaceutical development.
They could also help solve complex optimisation problems in logistics, finance and risk management.
For financial institutions in particular, the technology could offer new tools for detecting fraud, analysing market behaviour and optimising portfolios.
But the shift will not happen overnight.
“One message to take away is that quantum is not going to suddenly solve all of your problems,” Reilly said.
Instead, he said quantum systems will likely complement existing computing technologies as part of a broader and more diverse computing ecosystem.
Why data centres may soon “go cold”
One key change already emerging is how computing systems are physically designed.
Many next-generation technologies, including quantum processors, operate far more efficiently at extremely low temperatures. As a result, future data centres may rely heavily on cryogenic cooling systems to manage heat and energy consumption.
Reilly believes that the shift will gradually reshape the computing industry.
“Over the next five years, you’re going to see data centres go cold,” he said.
“And as that happens, they almost drag with them new compute paradigms.”
Emergence Quantum, the company he co-founded, is focused on developing technologies to support that transition, including cryogenic electronics and integrated hardware platforms designed for quantum computing and energy-efficient systems.
A new technological era
For investors and businesses, the technology remains in its early stages. But the scale of global interest is growing rapidly.
Governments, research institutions and technology companies are investing heavily in quantum research, betting it could become a foundational technology for the next generation of computing.
For Reilly, the moment feels similar to earlier technological turning points.
In the 19th century, new discoveries in thermodynamics helped drive the development of steam engines and the Industrial Revolution. In the 20th century, advances in electromagnetism led to radio, television and eventually the internet.
Quantum physics, he suggests, could represent the next chapter in that story.
“Today we have, as a society, in our hands new physics that we’re just beginning to figure out what to do with,” Reilly said.
“But I think it’s an exciting time to be alive and watch what happens over the coming decades.”
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