Raise rates to 1% or more

The Reserve Bank of Australia is likely to change the cash interest rate today. My best guess is that they will increase rates by 0.4%, bringing the cash rate up to 0.75%.

In my opinion they should increase rates by at least 0.65%, bringing the cash rate up to at least 1%. This would be bad news for Australians with outstanding loans (myself included) but I think it's the right thing to do for the country.

Australia's monetary policy has been too loose for too long, and the consequent inflation is starting to bite. Interest rate rises are inevitable. The temptation will be to move slowly in raising rates to minimise the economic shock, but I believe that approach underestimates the risk of spiralling inflation. The RBA should act decisively now to get cost of living pressures under control.