Consequences of the Repo Rate Policy Decision on Everyday Consumers AI Technology & the Future of Work

By the time you read this, the Monetary Policy Committee would have delivered the muchanticipated decision on the interest rate policy. Speculations (at the time of writing) are rife as to which way the scales will tip. While there is a glimmer of hope that interest rates may hold steady, the financial world is all too aware of the potential pitfalls that could usher in yet another rate increase.

Despite the fervent prayers of many, who are hoping against hope for a stable interest rate environment, the rumour mill suggests that there’s a higher likelihood of interest rates rising yet again.

Here is what will happen if the repo rate interests go up

Governor Kganyago emphasizes that monetary policy decisions will be based on data. The MPC adjusts the repo rate to keep inflation within its 3% to 6% target range and as it stands, the latest figures in inflation are showing a drop to 6.9% in January. Although this is an ideal position to keep the repo rate steady, it is still below MPC’s stated midpoint target range. With this insight, it is almost impossible to foresee the potential decision of the Monetary Policy Committee.

RE/MAX of Southern Africa is projecting a potential 0.25-0.5% increase in sales Increased cost of borrowing: This means that it will become more expensive for ordinary South Africans and businesses to borrow money, which can lead to decreased spending.

Decreased economic growth : As individuals and businesses reduce spending this can have a negative impact on job creation and income growth.

Increased mortgage payments: For those with variable-rate mortgages, an increase in the repo rate can lead to higher monthly mortgage payments, which can put a strain on household budgets.

With the dire consequences of the repo rate interest rate increase, South Africans are advised to try and payoff, and keep their spending below their earnings.

Artificial intelligence (AI) has already made significant strides in transforming the way we live and work. We already use AI virtual assistants like Siri and Alexa in our daily lives.

AI technology is a threat to professionals, and is being felt by tech giants such as Google. On a positive light, AI-powered tools like virtual assistants, calendar scheduling systems, and task management apps can help individuals automate repetitive tasks. This can free up time for more important things, such as learning the skills that cannot be adopted by a robot, and spending more time with loved ones.

There is no denying that AI will have a significant impact on the job market. Some jobs will inevitably be replaced by in the short term, particularly those that involve repetitive or routine tasks. A couple of white collor jobs are also threatening. There is thus a need for a gear shift in personal, industrial and government sector.

Individuals need to prepare for the near future, while industries should find creative ways to adopt these new technologies without radically retrenching human personnel. The state should also make policies that will protect citizens’ livelihoods.

With this radical change in the job market also comes an opportunity for newer industries and markets. The key to succeeding in this new job market will be to develop skills that are difficult to automate, such as creativity, problem-solving, and interpersonal skills.

Self-employment opportunities are also expected to flourish as many of the tasks can be designated to AI tools. For example, a person who runs an ecommerce store can assign AI tools to taking orders and to customer support services leaving that person more time to promote the business, among other things. Prepare for the new revolution by learning skills that cannot be automated and using AI technology for maximum production.