RBA Raises Interest Rates for 10th Consecutive Meeting
Another Blow to Australia's Borrowers
Cash Rate Target Graph and Table
The Reserve Bank of Australia (RBA) has raised interest rates for the 10th consecutive meeting, dealing another blow to Australia's borrowers. The cash rate target has now been lifted to 3.10%, the highest level since December 2012.
The RBA's decision was widely anticipated by economists, who had been expecting a further rate hike in light of recent inflation data. The annual inflation rate has risen to 7.8%, well above the RBA's target of 2-3%. The RBA is now forecasting that inflation will peak at around 8% later this year before gradually declining.
The rate hike is likely to have a significant impact on Australian households, particularly those with variable-rate mortgages. The average variable mortgage rate is now around 5.5%, which is more than 2% higher than it was at the start of the year. This will increase monthly mortgage repayments for many households, putting further pressure on their budgets.
NAB Chief Economist's Forecast
Despite the RBA's latest rate hike, National Australia Bank's chief economist, Alan Oster, believes that the RBA will hike rates once more in February, taking the cash rate target to 3.35%.
Oster said that the RBA is likely to continue raising rates until it is confident that inflation is under control. He also noted that the RBA is likely to be cautious about raising rates too quickly, as this could lead to a recession.
Conclusion
The RBA's latest rate hike is a reminder that the Australian economy is still facing significant inflationary pressures. While the RBA is taking steps to address these pressures, it is likely that interest rates will continue to rise in the coming months. This will have a significant impact on Australian households, particularly those with variable-rate mortgages.
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