29 Apr ALL EYES ON THE RBA; FINANCIAL ADVICE CRISIS SET TO WORSEN.
Welcome to this week’s business and media intelligence update.
ALL EYES ON THE RBA
If you’ve been at the grocery check-out lately, it’ll come as no surprise that prices are on the up. Official figures released on Wednesday confirmed that the annual inflation rate has risen to 5.1 per cent – the highest level since 2001.
The greatest pinch for households is rising petrol prices, which jumped 11 per cent in the March quarter, driven by the war in Ukraine. Also on the rise is the cost of food (2.8 per cent), university fees (6.3 per cent) and new homes (5.7 per cent).
There has been speculation that official interest rates will start to rise in June, but the higher-than-expected inflation surge now points to May as a possibility.
If rates were to rise then, it would mark the first such hike during a federal election campaign since 2007, when the Coalition – led by John Howard – was defeated.
All eyes will be on the Reserve Bank of Australia on Tuesday when it meets to discuss the official interest rate.
TWITTER’S FUTURE IN 801 CHARACTERS
Twitter has only earned a profit twice in the past 10 years. So, why did Elon Musk buy the social media site for $60 billion?
The platform, which is frequented by world leaders, celebrities, cultural trendsetters (and once frequented by Donald Trump), isn’t the only company in Musk’s portfolio struggling to turn a profit.
SpaceX and The Boring Company – an infrastructure and tunnel building business – are also yet to break even. As for Tesla, it turned its first profit just 18 months ago when sales increased dramatically in China and Europe and the newly released Model Y became a US top seller.
Luckily for the world’s richest person, financials aren’t a concern.
Musk says his priority is not money but promoting free speech – something he previously described as “essential to a functioning democracy”.
But Twitter isn’t in the same realm as Musk’s usual business undertakings, and he might soon realise space travel is easier than content moderation.
FINANCIAL ADVICE CRISIS SET TO WORSEN
Australia’s financial advice crisis is predicted to worsen, with the total number of advisers expected to drop below 17,000 for the first time by July.
Industry analysts say tough compulsory exams, bad publicity over adviser scandals and the withdrawal of major banks from the sector are putting increasing pressure on individual planners.
But not all hope is lost. According to the Financial Planning Association, controlling rising expenses and managing red tape could lure advisers back to the industry.
After all, demand has never been higher…
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