RBA interest rate

2023 - 2 - 6

Cash rate - RBA cash rate

Post cover — Image courtesy of "The Sydney Morning Herald"

Australia news LIVE: RBA lifts interest rates to 10-year high; Greens ... (The Sydney Morning Herald)

The Coalition is ramping up its attacks on the government's handling of cost-of-living pressures, Lidia Thorpe is leaving the Greens and alcohol bans have ...

“Responsible cost-of-living relief, dealing with workforce shortages and issues in supply chains, at the same time as we show spending restraint. Since the Reserve started lifting rates, the monthly repayments on a $750,000 mortgage will have climbed by almost $1400. The central bank began hiking rates in May last year, when the cash rate was a historic low of 0.1 per cent.

RBA interest rates: Reserve Bank lifts official rate to 3.35% in record ... (The Guardian)

Mortgage holders likely to feel immediate pain but RBA indicates further increases to come in attempt to bring inflation under control.

Still, the RBA is not expecting a major increase in the jobless rate. “The budgets of many home borrowers will be under considerable strain over the coming year.” “It will be some time, though, before inflation is back to target rates” of 2%-3% over time. Financial markets also priced in a higher RBA rate summit before it declines. The increase dented the Morrison government’s re-election hopes but further rises at every RBA board meeting since have posed new treasurer Jim Chalmers a monthly challenge to explain why debt repayment costs were rising yet again. In December, the rate was hovering near half-century lows of 3.5%, and the central bank now expects it to edge up to 3.75% by the year’s end and rise further to 4.5% by mid-2025. In a signal that the RBA sees the cash rate rising by at least another half percentage point, Lowe said “the Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary”. “The RBA is determined to avoid a prices-wages spiral, which would make their job more difficult in the year ahead,” Murphy said, noting the December quarter wage price index would be “keenly” assessed when it is released by the ABS on 22 February. While the forecast of a decline to 4.75% this year is unchanged from the RBA’s previous statement released in November, Lowe added that CPI would recede to “around 3% by mid-2025”, indicating the lengthy glide path ahead. “It is, however, moderating in response to lower energy prices, the resolution of supply-chain problems and the tightening of monetary policy,” Lowe said. The Reserve Bank at its first board meeting of 2023 on Tuesday raised its cash rate 25 basis points to 3.35%, its highest level in just over a decade. Australia’s central bank has slugged borrowers with another increase in interest rates, extending the record run of hikes to nine meetings in a row as it tries to cut inflation, and indicating there are “further increases” to come.

Statement by Philip Lowe, Governor: Monetary Policy Decision ... (Reserve Bank of Australia)

At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.35 per cent.

The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that. Another source of uncertainty is how the global economy responds to the large and rapid increase in interest rates around the world. The central forecast is for the unemployment rate to increase to 3¾ per cent by the end of this year and 4½ per cent by mid-2025. The Board recognises that monetary policy operates with a lag and that the full effect of the cumulative increase in interest rates is yet to be felt in mortgage payments. Wages growth is continuing to pick up from the low rates of recent years and a further pick-up is expected due to the tight labour market and higher inflation. Inflation is expected to decline this year due to both global factors and slower growth in domestic demand.

RBA interest rates: Reserve Bank lifts cash rate to 3.35pc, says more ... (The Australian Financial Review)

The Reserve Bank pressed ahead with a ninth straight increase to the official interest rate, taking it to 3.35 per cent and indicated more rises would be ...

[Sign up now](https://login.myfairfax.com.au/signup_newsletter/10122?channel_key=9ME3ACTT4ZYY1fEMfvR2EA&callback_uri=https://www.afr.com) [Ronald Mizen](/by/ronald-mizen-gyvn3t)is economics correspondent for the Australian Financial Review based in Parliament House, Canberra. Dr Lowe said the bank believed headline inflation was now beginning to fall. High inflation makes life difficult for people and damages the functioning of the economy,” Dr Lowe said in a decidedly hawkish statement following the meeting. Email Ronald at [[email protected]](mailto:[email protected]) Dr Lowe said while global factors explained much of the high inflation, “strong domestic demand is adding to the inflationary pressures in a number of areas of the economy”. [“corporate profiteering” was not a primary cause of inflation in Australia](https://www.afr.com/policy/economy/inflation-not-driven-by-corporate-profiteering-treasury-20221108-p5bwjd) and strong consumer demand was playing into high prices rises. [avoid fuelling the inflation and inflation expectations.](https://www.afr.com/policy/economy/inflation-driven-wage-rise-could-push-interest-rates-higher-20230126-p5cfn0)” [while the median forecast peak in the cash rate was 3.6 per cent.](https://www.afr.com/policy/economy/disinflation-has-arrived-but-peak-cash-rate-tipped-for-3-6pc-20230203-p5chr4) The central forecast for unemployment is an increase to 3.75 per cent by the end of this year and 4.5 per cent by mid-2025. “The board is seeking to return inflation to the 2-3 per cent range while keeping the economy on an even keel, but the path to achieving a soft landing remains a narrow one,” Dr Lowe said. At its first meeting of 2023, the RBA board raised the cash rate by 0.25 percentage points and said it remained committed to ensuring the current high inflation period was “only temporary”. The Reserve Bank of Australia on Tuesday pressed ahead with a ninth straight increase to the official interest rate, taking it to 3.35 per cent, and said more rises would be necessary to tame high inflation despite some families experiencing “a painful squeeze” on their household budgets.

Interest rate updates: Philip Lowe says RBA will 'do what is ... (ABC News)

The Reserve Bank lifts interest rates by another quarter of a percentage point, with ANZ becoming the first bank to pass on the increase to its customers.

you) by hitting the phones. And if high inflation were to become entrenched in people's expectations, it would be very costly to reduce later," he writes. It can really be worthwhile finding a bank that will offer the lowest rates going (with the best terms for you). If you have the time and energy, this is exactly the moment to shop around and get banks to compete for your custom. Despite this, the impact of last year's rate increases won't be fully apparent until late this year. "I'm watching it with great anxiety, to be honest. They're not staying with the current banks," she observed. Extra hours that mean one of the parents is not able to pick up the kids after school. This would surely impact consumer spending across the board to share the pain , could be targeted by exempting non discretionary expenditure and would have much quicker impact than rate rises surely The current system is all built around the manipulation of interest rates. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that. In the past, central banks have lifted interest rates extremely high to strangle economic activity and deliberately manufacture a recession so they can "reset" the economy with lower prices.

RBA delivers ninth-straight interest rate hike with warning of more ... (9News)

The Reserve Bank of Australia (RBA) has handed down a ninth-straight interest rate hike, pouring pressure ...

"Inflation has been off everyone's radar for years, but now the increased cost of living is eroding our household budget. The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. "The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary," he said. "Another source of uncertainty is how the global economy responds to the large and rapid increase in interest rates around the world." "The Board recognises that monetary policy operates with a lag and that the full effect of the cumulative increase in interest rates is yet to be felt in mortgage payments," Lowe said.

'Painful squeeze' but more interest rate rises to come (The Age)

The Reserve Bank has warned of more interest rate increases as it fights to bring down inflation, sparking fears Australia could enter a recession later ...

Since the Reserve started lifting rates, the monthly repayments on a $750,000 mortgage will have climbed by almost $1400. [Subscribers can sign up to our weekly Inside Politics newsletter here](https://www.smh.com.au/link/follow-20170101-p5apym). Treasurer Jim Chalmers said each interest rate rise increased pressure on households as well as the economy. On a mortgage of $750,000, the increase will add $116 to monthly repayments. Economists said the increase – with more to come – heightened the risk of a recession this year. Inflation over 2022 reached 7.8 per cent, the