Why higher rates reduce spending

The Reserve Bank cut the cash rate target three times last year, but already there’s a U-turn. 

The RBA board is so concerned about inflation sticking around that it has increased interest rates for the first time since 2023.

Today, the ABC’s finance expert Alan Kohler on the RBAs failure to bring inflation down to its target and the mistakes it made in 2025. 

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Alan Kohler, ABC finance expert