SYDNEY, Nov 7, 2007 (AFP) – Australia’s central bank raised interest rates 0.25 points to an 11-year high of 6.75 percent Wednesday in a move expected to hurt Prime Minister John Howard’s re-election hopes. “Having weighed both the international and domestic information available, the board judged that a further increase in the cash rate was needed now in order to contain inflation in the medium term,” it said. The widely-predicted rise, aimed at curbing inflationary pressures, marked the first ever hike during a general election campaign and comes as embattled Howard fights for his political life ahead of a November 24 poll.
The Reserve Bank of Australia made its announcement after meeting Tuesday to discuss whether a rise was necessary after inflation data from the last quarter showed across the board rises.
It was the sixth rate rise since an election in 2004 that Howard won on a promise to Australian mortgage-belt voters that his conservative government would keep rates lower than the opposition centre-left Labor party.
Howard acknowleged that the latest rate rise would hurt borrowers.
“I would say to the borrowers of Australia who are affected by this change that I am sorry about tha