The Reserve Bank’s latest interest rate decision will hurt those on the “margins”, compounding the cost of living crisis but doing little to address spiralling inflation. 7NEWS
“The RBA and all central banks are between a rock and hard place,” Alex Joiner, chief economist at IFM Investors, told 7NEWS.com.au.
The Commonwealth Bank followed on Wednesday, increasing its home loan variable interest rates by 0.50 per cent from June 17. High costs of petrol, energy and groceries hitting Australians are unlikely to be brought down by increasing interest rates. “You’re getting people to pull back their spending on discretionary retail and their bills and things like that, and forcing them to pay more interest to a bank on their home loan.
If the bank fails in that end, and pushes demand “down too much, well that’s a bad outcome”, he said. “I don’t think a half a per cent is going to put many people in trouble, given that we’ve had a reasonable tightening of credential standards,” he told 7NEWS.com.au.
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