Interest Rates Up

The Reserve Bank have just announced that official interest rates have increased by one quarter of a percent. As I've often said, if such a tiny increase is enough to put you in hot water, you're in over your head anyway, and other inflationary measures - particularly the increasing oil price - already represent the equivalent of a rates rise. Experts - many of whom opposed a rise in the first place - predict this will cause a slowdown in consumer spending and spending on housing. However, Ross Gittins argues in favour of higher petrol prices in an interesting piece in the SMH today, and makes some good points. After all, we talk about $1.40 being scandalously high for a finite resource, when we pay over $3.00 for something that comes out of a cow, and will always come out of a cow, and cows are rather likely to last longer than our oil reserves.