The Reserve Bank is widely tipped to keep interest rates on hold when it meets today, but more hikes are expected later this year as 550,000 people come off fixed mortgages. The RBA itself warns that could put more people in financial stress, writes Nassim Khadem.
An emergency warning is in place for Seacombe, Loch Sport, Briagolong, Stockdale, Iguana Creek and Glenaladale in Victoria. Keep up to date withThe Reserve Bank of Australia will hold a meeting today — the first to be chaired by new governor Michele Bullock – and economists and markets are widely tipping that it will keep interest rates on hold.
The strain from interest rate hikes is already starting to show, with RBA data this week confirming that more Australians are being pushed into financial hardship, which could worsen in the coming weeks and months as another 550,000 Australians roll off fixed mortgages and onto higher variable rates.
"This new cohort of 'solid middle to upper income' callers was on top of the more familiar cohort at the lower end of the income distribution who had more often required the help of financial counsellors and social service," the RBA email said.There's a long lag between people first experiencing financial stress and it leading to loan arrears, as Australians do whatever they can to hold onto their homes.
While all four big bank banks are forecasting a hold on Tuesday, National Australia Bank predicts another hike next month following the quarterly inflation figures. NAB tips the RBA will lift rates to 4.35 per cent in November.A major reason why economists are betting there will be at least one more rate hike and no cuts until later next year is because of the threat of higher-than-expected inflation.suggests that the property market has held up due to higher migration.
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