Mortgage holders likely to feel immediate pain but RBA indicates further increases to come in attempt to bring inflation under control
“The RBA is determined to avoid a prices-wages spiral, which would make their job more difficult in the year ahead,” Murphy said, noting the December quarter wage price index would be “keenly” assessed when it is released by the ABS on 22 February.
Commonwealth Bank , Australia’s biggest bank, amended its earlier forecast that the RBA’s cash rate would peak at 3.35%. It now expects 25 basis point increases in both March and April, for a top rate of 3.85%. ANZ, which now looks to be closer to the mark with its earlier forecast of a 3.85% peak cash rate, is sticking to that forecast.
Lowe indicated GDP growth this year would be about 1.5% this year and next, a reduction compared with a 2% prediction for 2023 contained in the RBA’s November version of its quarterly monetary policy statement.
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