Hedge Clippings | Friday, 21 October 2022
It wasn't so long ago that most Australians were somewhat embarrassed - whatever their political affiliations - by the turnover of residents of The Lodge. It was a tumultuous period, following 11 years of political stability under John Howard. Rudd yo-yo'd with Gillard before the Liberals got into the act with Tony Abbott, Malcolm Turnbull, and then Scomo taking the keys. Oh! to have the government's removalist contract during those heady years! On the face of it, those times seem well past under Albo (PM number 7 since Kevin '07 if you count him twice) introduced his seemingly steady hand.
Not to be outdone, it seems the UK is intent on going down the same track. Since Labour's Tony Blair resigned in 2007 after 10 years as PM (interestingly almost shadowing John Howard's tenure, albeit on the opposite side of politics, although both supported the invasions of Afghanistan and Iraq) Great Britain has had 5 PM's, and within a week that will rise to 6. Who knows, it may even herald the return of Boris Johnson to mirror the Gillard - Rudd years? However much we might have felt things were a little crazy in Canberra in those days, surely nothing comes close to the chaos that seems to have enveloped Westminister over the past six months or so.
One sort of knew that life under Boris would be a roller coaster - in many ways that's what he promised - even if his eventual demise was akin to something out of Alice in Wonderland and the Mad Hatter's tea party, except Boris always made a show of being hatless, and the tea party was replaced by champagne in the garden at Number 10. The whole selection process for his successor seemed equally bizarre, as two candidates from the same party went hammer and tongs at each other in a series of televised debates, with the loser among their peers getting the nod from the conservative party faithful. The final outcome (with the benefit of hindsight of course) was the elevation of Liz Truss, formerly anti-monarchy, as PM, which seemed a triumph of ambition over ability, or as King Charles lll was heard to mutter; 'Back again? Dear oh dear!'. No wonder!
All this might be amusing (or at least "bemusing") were it not so serious. Once looked up to (by some at least) as the centre of democracy, and the cornerstone of the World's economy, the UK is now in political and economic disarray at the very time stability in both is required. One can only hope that given the importance of the task, the next incumbents of Numbers 10 and 11 Downing Street last a little longer, and restore some sense of order.
Back home, the Albanese government appears to have restored stability to Australia in an unstable world. Next week the new Treasurer brings down his first budget, with the main thrust well telegraphed via the media either to get feedback (abandon legislated Stage lll tax cuts at your peril) or to soften us up for reality (live within your means, and accept inflation, and higher interest rates).
Meanwhile, the week after next the RBA meets on Cup Day, November 1st, with the US FOMC meeting on November 1st & 2nd. Both are likely to result in a rate rise, although the RBA's might only be 0.25%, while the FOMC is poised for a 93% probability of another 0.75% hike according to CME Group's Fed Watch Tool.
With reports of mortgage stress and refinancing increasing, and impending price rises as a result of the widespread floods, one would expect that a rise of 0.25% from the RBA will be sufficient.
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