Higher interest rates are partly Labor’s doing

Interest rate decisions can be tipping points for governments – particularly on the eve of an election.

Two years of rate rises peaked for the Hawke government at an eye-watering 17.5 per cent in 1989. But one rate cut early in 1990 helped set up Labor’s election win that year. Hawke’s economic team had correctly predicted that even with rates so high, their downward direction proved critical.

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