Australia’s central bank kept interest rates steady on Tuesday, deepening a split with global counterparts including the Federal Reserve that are loosening policy as they grow increasingly confident that inflation is under control, the Wall Street Journal reported. The Reserve Bank of Australia’s decision to hold the official cash rate at 4.35%, which was widely expected by economists, reveals the stark choice facing policymakers who continue to worry about price pressures that are lessening elsewhere in the world.
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Australia’s latest attempts to solve its housing crisis are stuck in political gridlock as the amount of available rental space in the nation hovers near a record low, Bloomberg News reported. A key piece of the center-left Labor government’s housing program is in limbo after opposition parties on Wednesday voted to defer for two months legislation that aims to help first home owners break into the market. The bill is for a shared equity scheme which would allow citizens to buy houses with a smaller deposit.
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Pub baron Jon Adgemis’ embattled Public Hospitality Group has taken another hit with receivers and external managers appointed at five of his Sydney hotels, including Oxford House and The Strand Hotel, the Sydney Morning Herald reported. Insolvency specialist FTI Consulting has stepped in as receivers and managers to operate Public’s hip Redfern pub The Norfolk, Oxford House in Paddington and Darlinghurst’s The Strand Hotel, as well as Alexandria’s Camelia Grove Hotel and The Exchange Hotel, also in Darlinghurst. The pubs will be sold as soon as possible.
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The Reserve Bank of Australia said it continues to anticipate the unemployment rate to rise only gradually over the coming months and for conditions in the job market to remain relatively tight, the Wall Street Journal reported. “Conditions in the labor market have eased since late 2022, but our assessment is that the labor market is still tight relative to full employment,” Sarah Hunter, RBA’s chief economist and Assistant Gov., told a financial markets conference Wednesday.
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Australia’s banking regulator has proposed lenders scrap the use of AT1 bonds in capital requirements, potentially becoming the first jurisdiction to phase out the securities that were wiped out after Credit Suisse’s collapse last year, Bloomberg News reported. Replacing additional tier 1 bonds with existing, more reliable securities would simplify and improve the effectiveness of bank capital in a crisis, the Australian Prudential Regulation Authority said in a statement on Tuesday.
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Australia’s commodity-rich economy recorded its weakest growth momentum since the early 1990s in the second quarter, as consumers and businesses continued to feel the impact of high interest rates, with little expectation of a reprieve from the Reserve Bank of Australia in the near term, WSJ Pro Bankruptcy reported. The economy grew 0.2% in the second quarter from the first, with annual growth running at 1.0%, the Australian Bureau of Statistics said Wednesday. The results were in line with market expectations.
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