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RBA lifts interest rate for the sixth month in a row, in another blow to borrowers

sofie formica + Neil Breen
Article image for RBA lifts interest rate for the sixth month in a row, in another blow to borrowers

The Reserve Bank of Australia has lifted interest rates for the sixth consecutive month, despite the fears of some economic analysts. 

The official cash rate was raised 25 basis points to 2.6 per cent at today’s policy meeting, in a move the central bank says will help tame soaring inflation.

NAB chief economist Alan Oster said he fears the economy will slow as Australians, who haven’t seen rate hikes of this level, become increasingly nervous.

“It takes a while for all of these interest rates to flow through to people, we look at our own book and we see that most people haven’t started to pay the extra amount, that’s about to happen now.

“The problem with monetary policy, it takes a while to have its impact.”

He said a lot of people will be rolling off their fixed loans and onto variable loans.

“I do worry that they will save a lot, and not spend much, and the economy will slump.”

Press PLAY below to hear what he forecasts for the rest of the year

RBA Governor Philip Lowe indicated there will be more interest rate hikes on the horizon but it’s unclear how severe the increases will be.

Press PLAY below to hear the analysis on Afternoons with Sofie Formica

 

Image: Getty 

sofie formica + Neil Breen
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