- The Reserve Bank of Australia says inflation will peak higher than first predicted, rising to around 8 per cent.
- The last time Australians faced an inflation rate this high was 35 years ago.
Tuesday’s 0.25 percentage point increase was in line with what the majority of Australia’s big four banks has predicted. Only Westpac had forecast a cash rate increase of 0.5 percentage points.
The RBA’s latest cash rate increase paves the way for lenders to increase interest rates. Source: AAP
When will inflation begin to fall?
He said Australia could risk a severe recession unless the RBA continues to act “strongly” to beat down inflation by hiking interest rates.
“The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that,” he said.
How much will mortgage repayments increase after the latest rate rise?
Compared to pre-hikes in May, the same mortgage holder is now forking out an extra $760 per month in repayments. The RBA also foreshadowed more rate hikes to come.