"While today's decision to hold interest rates steady is welcome, a deeper reading of the Reserve Bank's decision is deeply sobering news for Australian businesses and households," Innes Willox, Chief Executive of the national employer association AI Group said today.
"We face the prospect of higher inflation for longer and further interest rate hikes sadly cannot be ruled out.
"While some businesses continue to do well, many more are treading water and data clearly indicates business closures are rising. For many businesses, particularly across construction, retail and hospitality and all those that service them, the current economic conditions are feeling increasingly recessionary.
"The bank has clearly indicated that an increase in unemployment is expected through the rest of this year as the economy tightens and households are forced to rein in spending. The prospects for the next six months are not rosy.
"Today's forecasts are a clear message that next week's budget cannot pour fuel on the inflation fire and the Government must be very cautious with its spending priorities. The upcoming minimum wage decision must also not add to inflationary pressures. If not, the inflation and interest rate pain for businesses and households will be prolonged and increasingly difficult," Mr Willox said.
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