Bankruptcies

Bankruptcies are starting to increase. figures released Friday showed bankruptcies, debt agreements and Part X insolvency agreements between April and June rose 3%.

The effects of a recession generally take some time to take hold. Due to the sudden collapse last time this is perhaps a little more pronounced. It is about now that business get to the point where they can't hold on any longer and start to collapse and let staff go. In the early 90s recession it took about a year before employment figures started to deteriorate and we are likely to start seeing that happen this time from around now.

The RBA meets this week and will likely keep rates on hold. They will come under some pressure in future months though if figures show a deterioration in the economy.