High inflation and interest rates have left up to 13 per cent of people with variable mortgages on the financial edge.
A growing number of Australians are on the cusp or in the early stages of financial stress, the Reserve Bank has revealed, with up to 13 per cent of borrowers spending more on essentials and mortgage repayments than they earn.
The Reserve’s six-monthly financial stability report is used to identify possible risks and pressures across the entire banking, non-bank and insurance sector. Across a broader measure of essential expenses, which includes items which are not easy to axe in the short term such as private health cover, the proportion of people living beyond their means has reached 13 per cent.“A small but rising share of borrowers are on the cusp, or in the early stages, of financial stress.
The bank said there was growing evidence of people making relatively small withdrawals from their accounts, a sign they were using the money for regular bills rather than spending on large discretionary items such as holidays. The Reserve is expecting unemployment to drift up to 4.5 per cent by the end of next year as higher interest rates affect the economy.Simon Schluter
Almost 30 per cent of insolvent companies are in the construction sector, with a similar percentage suffering from negative cash flow. The number of builders falling behind paying their bills to suppliers has also increased over recent months.Treasurer Jim Chalmers said the report was a reminder of the ongoing pressures facing the global financial system and world economy.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
On the cusp: RBA warns thousands of borrowers cannot make ends meetHigh inflation and interest rates have left up to 13 per cent of people with variable mortgages on the financial edge.
Read more »
Spending cuts not enough for some households: RBABorrowers with low incomes, high loan balances are feeling the strain as higher mortgage payments eat into cash flows and savings buffers, the Reserve Bank says.
Read more »
Spending cuts not enough for some households: RBABorrowers with low incomes, high loan balances are feeling the strain as higher mortgage payments eat into cash flows and savings buffers, the Reserve Bank says.
Read more »
RBA paints grim cost-of-living pictureAlmost a third of Australians are at risk of running out of their savings buffers within six months and could be left vulnerable in the event of further interest rate rises, the Reserve Bank has found.
Read more »
RBA bets against the world on interest ratesThe prospect of “higher for longer” interest rates is raising questions about whether the Reserve Bank’s less aggressive inflation fight can last.
Read more »
Australia rental crisis is RBA governor Michele Bullock’s predictable problem in an unpredictable worldThe confusion roiling global markets won’t end, but Australia’s rental crisis is a more fundamental imbalance of supply and demand. It means the RBA governor’s job won’t get any easier.
Read more »