Finally, before concluding I will refer to the ECB’s policy responses, and more broadly European policy responses, to contagion. The phenomenon of contagion: from research to policy Broadly speaking, financial contagion refers to a situation whereby instability in a specific market or institution is transmitted to one or several other markets or institutions. There are two ideas underlying this definition.
If we do make that progress, at some point it will be appropriate for interest rates in Australia to also start moving up. So, given recent developments in Australia and overseas, it is likely that the next move in interest rates in Australia will be up, not down.