The election campaign could be turned on its head with financial markets and economists increasingly convinced the RBA could start lifting rates next month. rates
The Reserve Bank is a 50-50 chance to deliver a late election campaign interest rate rise to millions of Australian home buyers with the nation’s second-largest lender warning people could face the largest one-off rate rise since the start of the century.
“However, given our expectations of a rapid further increase in underlying inflation and a forecast fall in the unemployment rate for April to a 48-year low of 3.8 per cent, we expect the board will decide on a bolder initial lift in the cash rate,” he said. By year’s end, they believe the cash rate will be at 2.25 per cent and by the end of next year at 3.5 per cent.The bank last lifted official interest rates in November 2010. Since then, more than 1.1 million people have taken out their first mortgage, never having experienced an interest rate increase.
Both sides of politics have aimed at cost of living issues throughout the election campaign. The Coalition announced $9 billion worth of measures, including a 22.1 cent a litre 6-month cut in fuel excise, in the budget. “If you walk down the main streets of this country, as we have been, then we understand people are falling further and further behind because of skyrocketing cost of living and falling real wages in the government’s own budget,” he said.
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