Maybe I am wrong but disagree.
Raising the cost of capital always makes things harder that is why it has been dropping for the last 30 years because it is the easy option.
That said a nobel winning economist has poo-pooed one of my reasons for raising interest rates which is to slow rising wealth inequality.
https://www.theage.com.au/business/t...06-p58xl9.html
To be honest I read the article and if I understand him correctly interest rates are low because investors see fixed interest as a better alternative than investing in business or land and running the economy hot will drive up employment and wages once there is a labour shortage.
Amazing how much crap you could come up with as an economist that sounds plausible. I think fixed interest rates are low because central banks are printing money and buying bonds to keep rates down. They are also setting the OCR at low levels which apparently affects short term rates. But who am I to argue with someone of Paul's intelligence.
I guess comparing today to early 19th century Britain is appropriate. I found this summary that seems to be the society we are set on creating.
"During the 19th century, members of the middle class were the moral leaders of society (they also achieved some political power). ... The upper class had titles, wealth, land, or all three; owned most of the land in Britain; and controlled local, national, and imperial politics."
Inflation is always and everywhere a monetary phenomenon. Rising prices are what central banks are after and they are getting them. Raising interest rates reduces inflationary expectations.
Obviously I am no economist but I thought raising interest rates was going to strengthen the Kiwi dollar not weaken it making fuel cheaper relatively speaking.