There’s been more pain for Australian homeowners, with the Reserve Bank confirming yet another interest rate rise.
Key Takeaways
- The RBA Board today increased the cash rate target by 25bp to 3.35%
- Further increases are expected in coming months.
- Australians with a $750,000 mortgage will need to pay back an extra $114 a month.
- Inflation is sitting at 7.8 per cent – its highest level since 1990.
The RBA confirmed the grim news on Tuesday afternoon that the RBA was issuing a 25 basis point hike, taking the cash rate to 3.35 per cent and making it the ninth rise in as many board meetings.
In yet another cruel blow, the RBA says it expected further increases in the months ahead in order to return inflation to its target.
“The board’s priority is to return inflation to target. High inflation makes life difficult for people and damages the functioning of the economy,” RBA governer Philip Lowe said.
The cash rate is now the highest it has been since September 2012.
Australians with a $750,000 mortgage will need to pay back an extra $114 a month.
“The board is seeking to return inflation to the two to three per cent range while keeping the economy on an even keel, but the path to achieving a soft landing remains a narrow one,” the RBA said in its statement on Tuesday.
“And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later.
Meanwhile the Australian share market has suffered its worst drop in a month following the announcement.
