Interest rates

July 31, 2007, 5:57pm,  303 views

The prospect of a rise in interest rates next month could be the end politically for the Howard Government. A cornerstone of the government’s success has been its image as a sound economic manager in turbulent times.

The threat from Iraq and terrorism has largely been proved false, contained and/or exaggerated.

Although governments aren’t directly responsible for what happens on the broader financial market, Howard’s credibility as the man with the lid on the genie bottle of inflation will be shaken if there is a rise in August, as widely expected.

The old fox is too clever to write off just yet. He has a swag full of funds to keep the pork barrel rolling. At this early stage though, my guess is it won’t be enough to win the election.