Business · Economy · 6 hrs ago
Rate rises and global shocks could push Australia into recession
Australia’s recession risk is back in focus after Reserve Bank governor Michele Bullock said five interest-rate rises this year could make people feel as if the country is in recession.
Qantas has announced large-scale job cuts, following restructuring at Canva and National Australia Bank.
A recession can be measured by rising unemployment, and one measure used by Reserve Bank staff would be triggered if unemployment rises enough from its recent low.
The bank forecasts unemployment reaching 5.1% by the end of 2028, which would not trigger that measure.
A faster rise in unemployment could trigger it as soon as January, if the recent pace continues.
Rate increases that go too far could cause a recession, because their effects take time to show up and policymakers cannot know immediately whether they have tightened enough.
A burst AI bubble is another possible risk, and a financial shock could affect Australia even if it began elsewhere.
Reserve Bank of Australia governor Michele Bullock said the cumulative effect of five interest-rate increases this year would make people feel as if the country were in a recession.
The article says a recession could result if the Reserve Bank raises rates too far, or if a global shock such as the bursting of an AI bubble causes a downturn.
The Reserve Bank’s latest forecasts see the unemployment rate rising to 5.1% by the end of 2028, which the article says would not trigger its preferred recession measure.
If unemployment keeps rising at its average pace over the past six months, the article says a modified version of the Sahm rule would be triggered in January next year.
Qantas became the third major Australian company in three weeks to announce large-scale job cuts, after restructures at Canva and National Australia Bank.
- Who
- The Reserve Bank of Australia, led by governor Michele Bullock, and Australian workers and businesses are central to the story.
- What
- Interest-rate rises and global shocks could push Australia into recession.
- When
- The article was published on 10 November 2026. It says the Reserve Bank’s five rate increases were made this year.
- Where
- Australia.
- Why
- The Reserve Bank may raise rates too far, or a global shock such as the bursting of an AI bubble could cause a downturn.
This story does not have two clearly opposing sides.
The Reserve Bank raised interest rates five times.
Governor Michele Bullock said the cumulative effect of the year’s rate increases would make people feel as if it were a recession.
Qantas became the third major Australian company to announce large-scale job cuts, after restructures at Canva and National Australia Bank.
The article says the modified Sahm rule would be triggered if unemployment continued rising at its average pace over the past six months.
- Rate increases
- Five this year
- Unemployment forecast
- 5.1% by the end of 2028
- Potential recession measure
- Modified Sahm rule
- Possible trigger date
- January next year
- Company job cuts
- Qantas was the third major Australian company in three weeks to announce large-scale cuts
1 source
What people are saying
is going to make people feel like it’s a recession