Homeowners could face further financial pain with the newly released RBA minutes revealing monetary policy may 'need to be tightened' further if inflation stays high and the global outlook fails to improve.
The Board ended its 10 consecutive rate rises at its last meeting on April 4 but minutes released on Tuesday now reveal the central bank considered raising interest rates by 25 basis points.
"Although higher immigration might reduce wage pressures in industries that had been experiencing significant labour shortages, members noted that the net effect of a sudden surge in population growth could be somewhat inflationary for a period." The RBA also noted that"required mortgage payments," which includes interest and scheduled principal payments, had already reached nine per cent of household income and that the rate at which households were making extra payments had slowed"suggesting less free cash flow."
Deloitte Access Economics released a report on Tuesday which heavily criticised the RBA's approach, with author Stephen Smith calling prior hikes"unnecessary" while warning of a"consumer recession." "At a cash rate of 3.6 per cent, most Australians will be just fine. Many, however, will not. In just 10 months, the cost of servicing an average $600,000 mortgage will have risen by more than $14,000 per year once those rate hikes are fully passed through."
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Chalmers says Reserve Bank overhaul will be significantHow the Reserve Bank of Australia governor and board set and communicate interest rate decisions faces the biggest shake up since the bank gained independence in the early 1990s.
Read more »
RBA considered April rate rise amid wages and migration fearsThe RBA board considered raising rates to 3.85 per cent, amid concerns inflation may increase due to strong population growth and large public sector wage rises.
Read more »
Chalmers seeks bipartisan support for RBA reformsMajor changes to the way the Reserve Bank operates and manages the economy will hinge on the federal government winning support from the Coalition, with Treasurer Chalmers declaring he doesn't want the Senate pulling apart any reforms to the institution.
Read more »
Investors dial up bets for higher Fed, RBA interest ratesThe US economy is not slowing quickly enough to stop the Federal Reserve from raising rates next month and lifted expectations of another rate rise in Australia.
Read more »
Investors dial up bets for higher Fed, RBA interest ratesThe US economy is not slowing quickly enough to stop the Federal Reserve from raising rates next month and lifted expectations of another rate rise in Australia.
Read more »
RBA’s last two rate hikes were ‘unnecessary’Deloitte’s latest forecast report suggests the RBA’s two interest rate hikes in 2023 were “unnecessary”, says Australian Chamber of Commerce and Industry CEO Andrew McKellar. “We certainly agree that the Reserve Bank did the right thing by pausing last month,” he told Sky News Australia. “We would urge them to keep pausing again as they meet at the next month – we don’t think at this point we need to keep rising interest rates.”
Read more »