Garry Barker and Leon Gettler - RBA Holding Interest Rates - Talking Business 2010 Ep 28c

A review of the week in business, with expert analysis and commentary

Garry and Leon talk about the RBA holding interest rates at 4.5%. Despite that, evidence suggests that inflation is building a head of steam and economists expect interest rates of 5% by the end of the year. House prices in major capital cities jumped 20% according to the Australian Bureau of Statistics, retail trade grew slowly, residential building approvals fell and sales of new homes have fallen to their lowest level since January 2009. The services industry is also shrinking. Still, Australia has recorded its biggest-ever monthly trade surplus at more than $3 billion, buoyed by surging coal and iron ore exports. With the mining boom, Rio Tinto’s net profit has tripled. Rupert Murdoch’s News Corporation is back in the black, boosted by the hit movie Avatar but Tabcorp’s profits are down 10%. Engineering company Downer EDI has ejected its second chief executive in three years while ISP iiNet has acquired the consumer division of AAPT from Telecom NZ for $60 million. American retailer Gap will open its first Australian store at Chadstone on August 26. Meanwhile, Graincorp and AWB have announced a multi-billion dollar merger to create Australia’s largest grain export company. Analysts say the booming Indian economy faces an energy crunch and that will boost the price of Australian coal. The outer western Melbourne suburb of Braybrook will see the starting point for a hardware battle between Woolworths and Bunnings. Sigma Pharmaceuticals gets another suitor. David Jones is being sued for $37 million for allegations of sexual misconduct, but the company says it will fight the legal action. Delegates at the Diggers and Dealers mining forum have been told to vote for the Liberals. Optus has completed an upgrade of its cable network to give it a competitive advantage over Telstra. Hills Industries has reported a four-fold increase in profits, NAB has revised its takeover plan for AXA Asia Pacific and Opposition leader Tony Abbott has modified his parental leave plan to appease big business. Fortescue Metals predicts that iron ore prices could drop by 25%.

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Garry Barker and Leon Gettler
RMIT, Business, Economics, news