RBA Board pushes cash rate to 4.1 percent
Mortgage holders are set to feel the pinch as board wrestles with stubbornly high services inflation
Mortgage holders are set to feel the pinch as board wrestles with stubbornly high services inflation
The Reserve Bank of Australia has decided to raise the cash rate by a further 25 basis points in a meeting of the RBA Board today.
The interest rate now stands at 4.1 percent and represents the 12th increase since April last year.
In a statement by Governor Philip Lowe, the board noted that inflation had already peaked at 7 percent but it looked likely to remain stubbornly high for some time. With the understanding that it is likely to be an unpopular move with mortgage holders, Mr Lowe said the decision was taken to provide ‘greater confidence’ that inflation would fall to manageable levels within a reasonable time frame.
“High inflation makes life difficult for people and damages the functioning of the economy,” Mr Lowe said. “It erodes the value of savings, hurts family budgets, makes it harder for businesses to plan and invest, and worsens income inequality.
“And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment.”
Although goods price inflation had slowed, he noted the impact of high services inflation, which remains high in overseas markets as well. Last week’s announcement by the Fair Work Commission that will see award wages rise by 5.75 percent and minimum wages by 8.6 percent from July 1 had further pointed to a likely rate rise.
Mr Lowe said the Board would continue to monitor economic conditions, including household spending and productivity both here and overseas but foreshadowed ‘some further tightening of monetary policy may be required’.
“The Board is still seeking to keep the economy on an even keel as inflation returns to the 2–3 per cent target range, but the path to achieving a soft landing remains a narrow one,” he said.
A significant source of uncertainty continues to be the outlook for household consumption, he said.
“The combination of higher interest rates and cost-of-living pressures is leading to a substantial slowing in household spending. Housing prices are rising again and some households have substantial savings buffers, although others are experiencing a painful squeeze on their finances.
“There are also uncertainties regarding the global economy, which is expected to grow at a below-average rate over the next couple of years.”
PropTrack senior economist Eleanor Creagh said projected wage increases and persistently low levels of unemployment had given the board ‘further headroom’ to consider today’s decision to raise the cash rate.
“The labour market remains tight,” she said. “Despite the unemployment rate rising, it remains close to multi-decade lows. The pipeline of wage increases in the public sector and (the) minimum wage decision are expected to maintain wages pressure, potentially fuelling inflation to remain elevated.”
The risk of a wage-price spiral is an ongoing concern for the central bank, she said.
“The RBA expects it will take a couple of years before inflation returns to the top of the target range, with the statement highlighting that the board is ready to do more to get inflation back down should it be necessary.”
This is in addition to rises experienced in housing prices this year, despite consistent increases in the cash rate. Ms Creagh said the conditions for higher home prices remained, despite the interest rate hike.
“The factors precipitating stronger housing demand – population growth and tight rental markets – remain alongside an undersupply of new homes,” she said. “This may see home prices to continue to lift in the months ahead.”
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At the World Plogging Championship, contestants have lugged in tires, TVs and at least one Neapolitan coffee maker
GENOA, Italy—Renato Zanelli crossed the finish line with a rusty iron hanging from his neck while pulling 140 pounds of trash on an improvised sled fashioned from a slab of plastic waste.
Zanelli, a retired IT specialist, flashed a tired smile, but he suspected his garbage haul wouldn’t be enough to defend his title as world champion of plogging—a sport that combines running with trash collecting.
A rival had just finished the race with a chair around his neck and dragging three tires, a television and four sacks of trash. Another crossed the line with muscles bulging, towing a large refrigerator. But the strongest challenger was Manuel Jesus Ortega Garcia, a Spanish plumber who arrived at the finish pulling a fridge, a dishwasher, a propane gas tank, a fire extinguisher and a host of other odds and ends.
“The competition is intense this year,” said Zanelli. Now 71, he used his fitness and knack for finding trash to compete against athletes half his age. “I’m here to help the environment, but I also want to win.”
Italy, a land of beauty, is also a land of uncollected trash. The country struggles with chronic littering, inefficient garbage collection in many cities, and illegal dumping in the countryside of everything from washing machines to construction waste. Rome has become an emblem of Italy’s inability to fix its trash problem.
So it was fitting that at the recent World Plogging Championship more than 70 athletes from 16 countries tested their talents in this northern Italian city. During the six hours of the race, contestants collect points by racking up miles and vertical distance, and by carrying as much trash across the finish line as they can. Trash gets scored based on its weight and environmental impact. Batteries and electronic equipment earn the most points.
A mobile app ensures runners stay within the race’s permitted area, approximately 12 square miles. Athletes have to pass through checkpoints in the rugged, hilly park. They are issued gloves and four plastic bags to fill with garbage, and are also allowed to carry up to three bulky finds, such as tires or TVs.
Genoa, a gritty industrial port city in the country’s mountainous northwest, has a trash problem that gets worse the further one gets away from its relatively clean historic core. The park that hosted the plogging championship has long been plagued by garbage big and small.
“It’s ironic to have the World Plogging Championship in a country that’s not always as clean as it could be. But maybe it will help bring awareness and things will improve,” said Francesco Carcioffo, chief executive of Acea Pinerolese Industriale, an energy and recycling company that’s been involved in sponsoring and organizing the race since its first edition in 2021. All three world championships so far have been held in Italy.
Events that combine running and trash-collecting go back to at least 2010. The sport gained traction about seven years ago when a Swede, Erik Ahlström, coined the name plogging, a mashup of plocka upp, Swedish for “pick up,” and jogging.
“If you don’t have a catchy name you might as well not exist,” said Roberto Cavallo, an Italian environmental consultant and longtime plogger, who is on the world championship organizing committee together with Ahlström.
Saturday’s event brought together a mix of wiry trail runners and environmental activists, some of whom looked less like elite athletes.
“We like plogging because it makes us feel a little less guilty about the way things are going with the environment,” said Elena Canuto, 29, as she warmed up before the start. She came in first in the women’s ranking two years ago. “This year I’m taking it a bit easier because I’m three months pregnant.”
Around two-thirds of the contestants were Italians. The rest came from other European countries, as well as Japan, Argentina, Uruguay, Mexico, Algeria, Ghana and Senegal.
“I hope to win so people in Senegal get enthusiastic about plogging,” said Issa Ba, a 30-year-old Senegalese-born factory worker who has lived in Italy for eight years.
“Three, two, one, go,” Cavallo shouted over a loudspeaker, and the athletes sprinted off in different directions. Some stopped 20 yards from the starting line to collect their first trash. Others took off to be the first to exploit richer pickings on wooded hilltops, where batteries and home appliances lay waiting.
As the hours went by, the athletes crisscrossed trails and roads, their bags became heavier. They tagged their bulky items and left them at roadsides for later collection. Contestants gathered at refreshment points, discussing what they had found as they fueled up on cookies and juice. Some contestants had brought their own reusable cups.
With 30 minutes left in the race, athletes were gathering so much trash that the organisers decided to tweak the rules: in addition to their four plastic bags, contestants could carry six bulky objects over the finish line rather than three.
“I know it’s like changing the rules halfway through a game of Monopoly, but I know I can rely on your comprehension,” Cavallo announced over the PA as the athletes braced for their final push to the finish line.
The rule change meant some contestants could almost double the weight of their trash, but others smelled a rat.
“That’s fantastic that people found so much stuff, but it’s not really fair to change the rules at the last minute,” said Paul Waye, a Dutch plogging evangelist who had passed up on some bulky trash because of the three-item rule.
Senegal will have to wait at least a year to have a plogging champion. Two hours after the end of Saturday’s race, Ba still hadn’t arrived at the finish line.
“My phone ran out of battery and I got lost,” Ba said later at the awards ceremony. “I’ll be back next year, but with a better phone.”
The race went better for Canuto. She used an abandoned shopping cart to wheel in her loot. It included a baby stroller, which the mother-to-be took as a good omen. Her total haul weighed a relatively modest 100 pounds, but was heavy on electronic equipment, which was enough for her to score her second triumph.
“I don’t know if I’ll be back next year to defend my title. The baby will be six or seven months old,” she said.
In the men’s ranking, Ortega, the Spanish plumber, brought in 310 pounds of waste, racked up more than 16 miles and climbed 7,300 feet to run away with the title.
Zanelli, the defending champion, didn’t make it onto the podium. He said he would take solace from the nearly new Neapolitan coffee maker he found during the first championship two years ago. “I’ll always have my victory and the coffee maker, which I polished and now display in my home,” he said.
Contestants collected more than 6,600 pounds of trash. The haul included fridges, bikes, dozens of tires, baby seats, mattresses, lead pipes, stoves, chairs, TVs, 1980s-era boomboxes with cassettes still inside, motorcycle helmets, electric fans, traffic cones, air rifles, a toilet and a soccer goal.
“This park hasn’t been this clean since the 15 century,” said Genoa’s ambassador for sport, Roberto Giordano.
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