HSBC: The Australian Central Bank's interest rate hike in February will be painful.

HSBC Chief Economist Paul Bloxham stated that if the Reserve Bank of Australia is forced to raise the overnight cash rate in February, the rate hike will be painful. He said that the rate hike in February would not be due to strong economic growth, but because the country's economy is prematurely hitting its supply constraints amid low productivity and strong public spending. The lack of supply-side reforms means that productivity growth has stalled. He added that HSBC's baseline forecast is that the Reserve Bank of Australia will not raise rates before the third quarter.