Reserve Bank governor Philip Lowe has warned Australians to be prepared for higher interest rates, saying inflation must be brought under control:
The Reserve Bank of Australia's governor Phillip Lowe has made his first public appearance since the central raised the cash rate by a larger than expected 50 basis points.Reserve Bank governor Philip Lowe has warned Australians to be prepared for higher interest rates, saying inflation must be brought under control., Dr Lowe said he is predicting inflation to rise to 7 per cent by the end of the year.
He said it is reasonable to expect the cash rate will get to 2.5 per cent at some point, but said it will be driven by events. It was only last year the RBA had been expecting to keep the cash rate low until 2024, but Dr Lowe said that was never a promise. He said the economy is in remarkable shape with the unemployment rate at a 50-year low, households having built up financial buffers of around $250 billion and the number of people falling behind on their mortgage repayments actually declining..His comments came as global share markets are in turmoil fearing the United States economy could fall into recession if the Federal Reserve raises interest rates aggressively to combat its own inflation problem.