The central bank has now raised the cash rate by 1.75 percentage points in four months, adding $770 a month to repayments on an $800,000 mortgage.
The Reserve Bank has lifted interest rates for a historic fourth month in a row, taking the cash rate to 1.85 per cent as it works to dampen rising inflation.
In a statement accompanying the RBA decision, Lowe said the board expected to take further steps as it worked to “normalise” monetary conditions over the months ahead, but was “not on a pre-set path”.“The board places a high priority on the return of inflation to the 2 to 3 per cent range over time while keeping the economy on an even keel,” he said.through the past 12 months, driven by higher building and fuel prices.
“There are widespread upward pressures on prices from strong demand, a tight labour market and capacity constraints in some sectors of the economy. The floods this year are also affecting some prices.”Lowe said consumers’ reaction to recent rate rises would be critical in how the bank tightened monetary policy in coming months.‘It’s not a shock to anybody but it will sting.’“Higher inflation and higher interest rates are putting pressure on household budgets.
Economists from investment group Jarden expect home prices to fall by 15 to 20 per cent by the end of 2023, and predict steeper falls in Sydney and Melbourne because of affordability constraints., after rising 28.6 per cent during the first two years of the coronavirus pandemic.
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Reserve Bank lifts rates for historic fourth consecutive monthThe central bank has now raised the cash rate by 1.75 percentage points in four months, adding $770 a month to repayments on an $800,000 mortgage.
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