RBA Delivers Expected Pre-Christmas Rate Rise
Last updated on December 12th, 2022
At its December board meeting, the RBA lifted rates by 25 basis points to 3.1% which is its highest level since December 2012, and the eighth consecutive monthly raise. The Consumer Price Index now sits at 6.9% for the 12 months to October, which is down slightly from September’s quarterly figure of 7.3%. The Australian economy grew 0.6 per cent during the September quarter, and 5.9 per cent compared to last year. This was the fourth consecutive quarter of growth since the COVID-19 Delta variant lockdowns. An interesting fact is that Australia's economy is 6.4 per cent larger than before the pandemic struck.
Runaway inflation is still top of the agenda for the RBA, as it is with many Western countries post-pandemic.
RBA Rate Review Reprieve
The good news for stressed household budgets is that the RBA board doesn’t meet again until February, so there will be at least a one-month reprieve. “There is likely to be a further 25 basis point rise in the first quarter of 2023, followed by a pause as the RBA assesses the impacts of rising rates on households and economic conditions,” said PropTrack senior economist Eleanor Creagh. “It takes time for higher interest rates to fully impact household cash flows and spending intentions, particularly with so many home loan borrowers having taken advantage of record low fixed rate mortgages throughout the Covid period,” Ms Creagh said.
If you are concerned about rising interest rates and living expenses, then you should speak with a mortgage broker > about reducing your interest rate and monthly repayments.
