Despite inflation rising to 5.2 per cent in August, homeowners can rejoice at the Reserve Bank of Australia’s decision to hold interest rates at 4.1 percent as per their announcement on October 3.
New Governor of the RBA Michele Bullock who took over from Phillip Lowe last month, did not however leave the notion of further hikes out of the picture.
Ms Bullock said, “Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks.”
“In making its decisions, the board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market,” she said.
With the national debt hotline reporting heightened distress calls and the reported overall lowering of inflation since the peak period of December 2022, the decision to stagnate interest rates did not come as a complete surprise.
All four of Australia’s big banks (Commonwealth Bank, Westpac, Nab and ANZ) predicted the prevailing of the 4.1 per cent mark, however due to hold ups in the labour market such as productivity costs, inflation levels may take longer than anticipated to curb.
Currently the RBA is aiming to reach the annual consumer price inflation target of 2-3 per cent as soon as possible.
Whilst those with home loans are celebrating the stay on interest rates, a hike in retiree spending may be a reflection of those benefiting from heightened interest rates.
