The Reserve Bank of Australia maintains interest rates at a 12-year peak amidst easing inflation, while UK economists challenge the Bank of England on its climate change commitments.
The Reserve Bank of Australia (RBA) has held the interest rate steady at 4.35% for the third consecutive meeting, a decision that maintains rates at a 12-year peak. This move comes as inflation in Australia shows signs of gradual reduction towards the RBA’s target range of 2%-3%. Despite this positive trend, the central bank warned that inflation remains high and signaled that future rate hikes could be considered if necessary to keep inflation in check. The Australian Treasurer, Jim Chalmers, responded positively to the RBA’s decision, underscoring the moderation in inflation. This development has raised prospects for the property market and saw a slight adjustment in the Australian dollar value against the US dollar, coupled with modest stock market gains.
Concurrently, in the UK, over 50 economists and environmental groups have raised concerns with the Bank of England regarding its commitment to climate goals. They criticised the central bank for reducing its focus on climate change initiatives and falling behind other major central banks in incorporating climate risks into financial policies, such as collateral frameworks and capital requirements. In a letter to Governor Andrew Bailey, they urged the Bank of England to enhance its efforts in addressing climate risks to fulfill its responsibility towards price stability and to align the financial sector with the UK’s climate objectives. This dialogue unfolds as the Bank of England faces expectations to maintain interest rates at 5.25%, amidst global environmental and economic challenges.