fifth rate rise for 2026 just last week<\/a>, bringing the cash rate to its highest point since the GFC.<\/p>\nIt comes as inflation rose 4.3 per cent over the past year and household spending remains resilient, growing 0.7 per cent in the September quarter.<\/p>\n
EQ Economics managing director Warren Hogan warned that spending growth keeping at this pace while inflation is elevated could spell disaster for Australian households.<\/p>\n
\u201cMy concern is that this resilience continues,\u201d Mr Hogan told News24 Business Now on Monday.<\/p>\n
\u201c(If) we don’t see the job losses, people do keep spending and inflation keeps going (then) wages might start picking up.<\/p>\n
\u201cMy horror story, and what snaps us as an economy into reality, is actually a boom-bust cycle.<\/p>\n
\u201c(That means) rates going up a lot and then us going into a recession in 2028.\u201d<\/p>\n
He warned the private sector could fall into a recession while the government keeps spending to technically keep the whole economy out of a recession.<\/p>\n
\u201cWe could see the economy just go into a private sector recession,\u201d Mr Hogan said.<\/p>\n
\u201cThe government’s still spending a lot (which will) probably keep the overall economy just ticking over.<\/p>\n
\u201cI don’t know which pathway we’ll take. We’re in uncharted territory. We’re in a new economy (and) because of those demographic shifts the thing that worries me in the short term is that boom-bust cycle.\u201d<\/p>\n
After hiking the cash rate last week, the RBA\u2019s governor Michele Bullock said the central bank does not forecast a recession, but noted it may feel like one.<\/p>\n
\u201cOur central forecasts do not see us going into recession, but it does see growth slowing quite markedly,\u201d Ms Bullock said.<\/p>\n
\u201cIt shows that consumption is quite sluggish and I think that is going to make people feel like it\u2019s a recession because they feel poorer, their spending can\u2019t grow very quickly because their incomes aren\u2019t growing very quickly.<\/p>\n
“This is a manifestation of the lack of productivity growth and the fact that we\u2019ve had this massive supply shock imposed upon us and we\u2019re all poorer.<\/p>\n
\u201cWe don\u2019t want to push the economy into recession. We do have a dual mandate, and although, at the moment, we are focusing on inflation \u2026 we haven\u2019t lost sight of the fact that we want to try and maintain, if we can, the gains in the labour market.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Australians have been warned of \u201chorror story\u201d scenario it may face as rate rises plague households while others…\n","protected":false},"author":2,"featured_media":958527,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[525862,525857,519694,10968,32601,393488,525850,525860,376730,525865,525870,525864,422354,392045,64,493164,63,42040,9461,99,14821,32092,21375,35794,11964,164,395589,17119,208,525846,42038,42930,525863,5465,5626,525867,507199,376544,13307,13052,525852,394669,422328,525847,525869,513117,513126,525873,1861,20246,117022,271977,14825,248,4846,395164,24237,378904,525849,525861,525853,402641,14822,122841,379398,525868,525855,434827,23023,525872,525848,380950,225862,188490,513315,390512,483298,377403,489278,422346,376983,525851,525871,410818,525856,525866,525854,525859,71969,4848,525858],"class_list":["post-958526","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-s-governor-michele-bullock","tag-horror-story-scenario","tag-0-7","tag-10968","tag-32601","tag-4-3","tag-a-boom-bust-cycle","tag-a-dual-mandate","tag-a-lot","tag-a-manifestation","tag-a-new-economy","tag-a-private-sector-recession","tag-a-recession","tag-an-economy","tag-au","tag-aussie-households","tag-australia","tag-australian-households","tag-australians","tag-business","tag-cash-rate","tag-cent","tag-consumer-spending","tag-consumption","tag-disaster","tag-economy","tag-eq-economics-managing-director-warren-hogan","tag-gdp","tag-growth","tag-horror-story","tag-household-spending","tag-households","tag-households-and-others","tag-inflation","tag-interest-rates","tag-its-fifth-rate-rise","tag-its-highest-point","tag-just-last-week","tag-last-week","tag-monday","tag-mounting-rate","tag-mr-hogan","tag-ms-bullock","tag-my-concern","tag-my-horror-story","tag-news24-business","tag-newswire-valeriu-campan","tag-our-central-forecasts","tag-people","tag-picture","tag-productivity-growth","tag-rate-rises","tag-rates","tag-reality","tag-recession","tag-scenario","tag-sight","tag-snapp-business","tag-spending-and-inflation","tag-spending-growth","tag-that-boom-bust-cycle","tag-the-cash-rate","tag-the-central-bank","tag-the-economy","tag-the-fact","tag-the-fifth-rate-hike","tag-the-gains","tag-the-gfc","tag-the-government","tag-the-job-losses","tag-the-labour-market","tag-the-lack","tag-the-moment","tag-the-nation","tag-the-overall-economy","tag-the-past-year","tag-the-private-sector","tag-the-rba","tag-the-september-quarter","tag-the-short-term","tag-the-thing","tag-the-whole-economy","tag-their-incomes","tag-their-spending","tag-this-massive-supply-shock","tag-this-pace","tag-this-resilience","tag-those-demographic-shifts","tag-uncharted-territory","tag-wages","tag-which-pathway"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/958526","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=958526"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/958526\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/958527"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=958526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=958526"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=958526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}