RBA interest rate

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.

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.

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.