Interest rates at highest level since mid-2012 as central bank continues to try to drive down inflation
The Reserve Bank has heaped more pain on borrowers, extending its record run of interest rate rises to a 10th consecutive increase in its bid to drive down inflation.
The rate is set to rise further but the RBA dropped its reference to needing multiple rises in coming months. The RBA has now lifted the key rate by 3.5 percentage points since kicking off increases from a record low 0.1% level during last May’s federal election campaign.If passed on in full by commercial banks, the cost of additional repayments on a typical $500,000 mortgage will have increased by about $1,000 per month since May, data groups say.
Indications that the rate rises to date are begin to sap excessive demand in the Australian economy include slower-than-expected economic growth in the December quarter andThe less hawkish outlook from Lowe and the RBA board on Tuesday was interpreted by investors to imply the central bank may soon pause or even reach its maximum cash rate during this part of the cycle.
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