News about public spending

Mortgage holders should expect rates to stay higher for longer, as the RBA warns that competition for global capital from AI and data centre companies is lifting the neutral rate. Assistant governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad, and the 4.6% cash rate is the highest in 15 years. Markets almost fully price in another rise by mid-2027 and do not expect rates to fall below current levels by mid-2028, while the term premium has hit a 12-year high. CBA chief economist Luke Yeaman argued that heavy government and AI spending makes rates less effective, so the RBA would have to hit households harder, and warned that loose fiscal policy would force it to push rates higher still. Federal government spending reached 26.9% of GDP in 2025/26, the highest in 40 years excluding COVID-19, and HSBC's Paul Bloxham urged further cuts in the mid-year update due in December.

The RBA's cash rate of 4.6% is the highest in 15 years, and markets almost fully price in another rate rise by mid-2027, with no cuts expected below current levels by mid-2028. The RBA says intense global competition for capital from AI and data centre companies is pushing up the neutral interest rate. Commonwealth Bank and HSBC economists argue that heavy government and AI-company spending makes rates less effective at reducing demand, and federal government spending reached 26.9% of GDP in 2025/26, the highest in 40 years excluding COVID-19. They urge the government to curb spending in its mid-year fiscal update expected in December, warning that otherwise the RBA will push rates harder. The term premium has climbed to a 12-year high, tightening financial conditions further.

France's public spending reached 57.2% of GDP in 2025, well above the euro-area average according to the OECD, with pension spending at around 14.1% of GDP as retirees grow in number relative to workers. A government report published in October found pensions take 32% of the education ministry's budget (€28.5 billion) and about 30% of the interior ministry's, averaging 13% across ministries, which leaves less room for schools and public services. According to Insee, the 2025 public deficit was 5.1% of GDP and public debt 115.6% of GDP, and the proposed 2027 budget seeks to rein in the deficit through spending restraint and changes affecting pensions and public-sector pay. Past reform attempts have provoked backlash, notably the 2023 move to raise the retirement age from 62 to 64, which triggered mass protests and has since been suspended.

Mortgage holders should expect interest rates to stay higher for longer, whether or not the RBA lifts them again. The RBA says intense global competition for capital from AI and data centre companies is pushing up the neutral rate, and assistant governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. The cash rate is now 4.6%, the highest in 15 years, and markets have almost fully priced in another rise by mid-2027, with no expected falls below current levels before mid-2028. Economists Luke Yeaman and Paul Bloxham link high government spending, at 26.9% of GDP in 2025/26 and the highest in 40 years excluding COVID-19, to weaker rate effects, and Bloxham urged further federal spending cuts.

Mortgage holders should expect rates to stay high for longer, whether or not the Reserve Bank of Australia (RBA) lifts them again. The RBA says competition for capital from AI and data centre companies is pushing up its estimate of the neutral rate, which Christopher Kent said appears to be rising in Australia and abroad. At 4.6 per cent, the cash rate is the highest in 15 years, markets have almost fully priced in another rise by mid-2027, and they do not expect rates to fall below current levels before mid-2028. Luke Yeaman of Commonwealth Bank warned that higher government spending would force the RBA to push rates harder, while Paul Bloxham of HSBC urged spending cuts after federal government spending reached 26.9 per cent of GDP in 2025/26. Treasurer Jim Chalmers has flagged further savings measures in the December update, though previously announced savings face resistance in parliament.

Mortgage holders should expect interest rates to stay high for longer, whether or not the RBA lifts them again. The RBA says intense global competition for capital from AI and data centre firms is pushing up its estimate of the neutral rate, and Assistant Governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. At 4.6%, the cash rate is at its highest in 15 years; markets have scaled back bets on another hike, but a rise by mid-2027 is nearly fully priced in, and no fall below current levels is expected before mid-2028. Heavy government and AI-related spending may be reducing the effectiveness of rates, forcing the RBA to hit households harder, and Luke Yeaman of Commonwealth Bank warned that more government spending would be a serious mistake. HSBC's Paul Bloxham urged further federal spending cuts, as federal spending reached 26.9% of GDP in 2025/26, the highest level in 40 years excluding COVID-19.

The People’s Budget Coalition (PBC) says the House-approved P7.2-trillion 2027 national budget contains P1.06 trillion in “red flag” allocations, including pork barrel projects and handouts it considers vulnerable to political patronage ahead of the 2028 election. The House reportedly cut P34.7 billion from the Metro Manila Subway and the North-South Commuter Railway, P53.5 billion from foreign-assisted bypass roads and highways, and P4.9 billion from DOH immunization, while redirecting P54 billion to local District Engineering Offices. Delays in foreign-assisted projects are adding costs; Finance Secretary Frederick Go said the government accumulated P3.4 billion in commitment fees from 2022. DOTr, seeking P12.8 billion to buy LRT-2 trains, is allowing public utility buses along the line as a temporary measure. Senate finance committee chair JV Ejercito pledged to restore and protect funding for the subway and railway lines.

About 550,000 people demonstrated across France on Saturday, according to the Interior Ministry; most marched peacefully, but a small minority attacked buildings, looted shops and clashed with police, and Prime Minister Sebastien Lecornu said 1,200 people were arrested and 150 officers injured. The protests began last month with high school students in Paris' northern suburbs angry over teacher shortages and poor facilities, then spread to other cities and joined trade unions, public sector strikers and “yellow vest” supporters. The anger is compounded by a proposed 2027 budget with a 54 billion euro package of cost-cutting and tax measures, including a freeze on civil servants' pay scale that unions say would be the fourth consecutive annual freeze. Experts say the crisis reflects deeper discontent with political paralysis since the 2024 elections, which left no bloc with an outright majority. President Macron said those responsible for violence would be “prosecuted and punished”, while Jean-Luc Melenchon accused the government of repressing students.

President Donald Trump rallied supporters at Northern Kentucky University in Highland Heights on Saturday, October 17, urging them to vote in the midterm elections, which he called 'the most important midterm in the history of our country'. He warned that 'radical Democrats' could undo his administration's accomplishments if they regain power, and promised $5,000 checks to American voters if Republicans keep control of Congress. He also announced a potential $100 million investment in a pharmaceutical plant in Winchester, Kentucky, contingent on a Republican victory. Republican candidates Eric Conroy and Ed Gallrein spoke before Trump, while the group Indivisible NKY staged protests nearby encouraging voter turnout.

President Donald Trump spoke at Northern Kentucky University in Highland Heights on Saturday, October 17, urging supporters to vote in the midterms and warning that radical Democrats could undo his administration's accomplishments if they regain power. He promised $5,000 checks to American voters if Republicans keep control of Congress, and announced a potential $100 million investment in a pharmaceutical plant in Winchester, Kentucky, contingent on a Republican victory. Trump praised the economy under his administration and criticized Democrats for policies he said led to high inflation and energy prices. Protesters from Indivisible NKY gathered nearby to encourage voter turnout.

President Donald Trump spoke at a rally at Northern Kentucky University in Highland Heights on Saturday, October 17, urging supporters to vote in the upcoming midterms. He called the election “the most important midterm in the history of our country” and warned that “radical Democrats” could undo his administration’s accomplishments if they regain power. Trump promised $5,000 checks to American voters if Republicans keep control of Congress, and floated a potential $100 million investment in a pharmaceutical plant in Winchester, Kentucky, contingent on a Republican victory. The visit is part of a nationwide push to back Republican candidates and energize conservative strongholds, with Trump touting the economy and blaming Democrats for high inflation and energy prices. Protests organized by Indivisible NKY took place nearby, with demonstrators urging voter turnout.

President Donald Trump addressed a rally at Northern Kentucky University in Highland Heights on Saturday, October 17, urging supporters to vote in the midterms. He warned that 'radical Democrats' could undo his administration's achievements if they regain power, and promised $5,000 checks to American voters if Republicans keep control of Congress. He also announced a potential $100 million investment in a pharmaceutical plant in Winchester, Kentucky, contingent on a Republican victory. Protests organised by Indivisible NKY took place nearby, with demonstrators encouraging voter turnout.

President Donald Trump held a rally at Northern Kentucky University in Highland Heights on Saturday (October 17), urging supporters to vote in the midterms and warning that “radical Democrats” could undo his administration's accomplishments if they regain power. He promised $5,000 checks to American voters if Republicans keep control of Congress, and announced a potential $100 million investment in a pharmaceutical plant in Winchester, Kentucky, contingent on a Republican victory. Several Republican candidates, including Eric Conroy and Ed Gallrein, spoke before Trump, while protesters organised by Indivisible NKY gathered nearby to encourage voter turnout.