Category Archives: Reserve Bank of Australia

Mortgage holders should brace for short-term pain as RBA signals steady interest rate rises to tackle inflation

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Philip Lowe says reserve bank looking for its ‘neutral rate’ which could see cash rate almost double in coming months

Mortgage holders should brace themselves for interest rate rises of at least another 1.15 percentage points before the end of the year as the Reserve Bank of Australia attempts to hose down inflation before it takes hold of the economy.

The RBA governor, Philip Lowe, said he believed inflation was on track to hit 7% by the end of 2022, with an unemployment rate of 3.5% but said the bank was confident inflation would return to the “target range” of between 2% and 3% in a “short while”.

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Mortgage holders could face large jump in repayments if interest rates increase by 3%, RBA says

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Deputy reserve bank governor, Michele Bullock, says most Australians are ‘well placed’ to absorb impact of rate rises

Up to 30% of mortgage holders could struggle to keep up with their home repayments if interest rates were to increase by 3%, according to the Reserve Bank of Australia, which says first-home owners, late entrants to the market and low-income loan holders are most at risk.

With the bulk of low fixed-rate loans due to expire in the next two years, about half of those coming into the new variable market will face increases in their repayments of at least 40%. For those whose fixed loans expire in the middle of next year, the reserve bank estimates a median increase of about $650 a month in repayments, or a 45% increase.

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Interest rate hikes may send about 200,000 more households into mortgage stress, says analyst

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Households struggling with loan repayments are ‘looking at a deep hole - incomes are not rising but costs are’

Many homeowners may be forced to tighten their belts after the Reserve Bank of Australia lifted the cash rate by half a percentage point, sending an estimated 200,000 households into mortgage stress.

On Tuesday, the RBA raised the official cash rate 50 basis points to 1.35% – the highest since May 2019.

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Senior ministers to retire before Victoria’s election – as it happened

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Housing market posts first monthly decline since September 2020; at least 52 Covid deaths recorded. This blog is now closed

Australian scientists celebrate world first

AAP is reporting that in a world first, Australian scientists have developed a device with “exquisite precision” that they say is a huge step towards a commercial quantum computer.

This is a remarkable piece of engineering. This experiment paves the way for larger and more complex quantum systems to be emulated in future.

It won’t be long before we can start to realise new materials that have never existed before.

All of this is just a fantasy because they don’t understand what actually happens at the bargaining table.

I think the Reserve Bank governor has weirdly changed his tune, he was the one who said so long as wages keep up with inflation and productivity, they are not inflationary.

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ASX: Australian stocks close almost 3.6% down after global sell-off on inflation fears

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Benchmark ASX200 index closes 246 points lower, after falling 360 points in the first 15 minutes of trading on Tuesday

Australian shares have joined a global retreat, ending almost 3.6% lower, as investors fear central banks will lift interest rates more aggressively, slashing economic growth and companies’ profits.

The benchmark ASX200 share index of the top 200 companies lost just over 5.2% within the first quarter an hour of trading, or more than 360 points. The losses, though, were pared by the end, with the market ending 246 points lower at 6,686. The Australian dollar also remained below 70 US cents.

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Reserve Bank hikes official interest rate by 50 basis points to 0.85% to curb inflation

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Decision exceeded predictions from economists while Westpac was the first of the big banks to pass on the rise in full to customers

The Reserve Bank has announced the biggest single rise in the cash rate in 22 years as Australia’s central bank tries to quash inflation before it gets out of control.

The RBA board at its regular monthly meeting lifted its cash rate target 50 basis points to 0.85%. Economists were again surprised by the size of the move, having been mostly split between predicting a 25 or 40 point increase, according to Bloomberg.

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PM says prospect of Chinese naval base in Cambodia ‘concerning’ – as it happened

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Prime minister responds to reports of Chinese naval base in Cambodia; nation records 29 Covid deaths. This blog is now closed

There’s no magic fix for inflation, Jason Clare says

Education minister Jason Clare appeared on the Today show this morning alongside Scott Emerson.

Inflation is through the roof. Wages are through the floor. We have got interest rates knocking at the door. The Reserve Bank ... have made it clear there will be a number of interest rate rises, which makes it harder for people with big rate rises already. Especially for people who are ahead in their mortgage, but if you have just signed up and the bank says you have to pay more, it will make it harder and harder.

There is no simple magic fix to this.

The market expects them to increase interest rates because we have an inflation problem in the economy and rising interest rates were something that the Reserve Bank governor flagged before the election and that is the trajectory we are on, but just because these interest rate rises are expected, it won’t make them any less difficult for a lot of people who are already confronting cost-of- living pressures.

That is the unfortunate reality. There is no point mincing words about that. Our job is the government is to make sure that after some of this near-term cost-of-living relief runs out that it is replaced by responsible long-term sustainable cost-of-living relief in areas like medicines and childcare, getting power bills down over time and getting real wages moving again.

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Real incomes shrink as wages growth of 0.7% in March quarter falls behind inflation

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Labor says figures released by the ABS show gap between wage growth and cost of living increases in Australia is now the largest in more than two decades

Australian wage growth barely budged in the March quarter, with salaries increasing at less than half the headline inflation rate, stoking concerns pay packets continue to shrink in real terms.

During the first three months of 2022, the seasonally adjusted wage price index (WPI) rose 0.7% from the December quarter to be 2.4% higher than a year earlier. Economists had tipped a quarterly and yearly rise of 0.7-0.8% and 2.5%, respectively.

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Ruston dismisses suggestion Liberal party has ‘lost its way’; Hunter candidates square off – as it happened

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Jim Chalmers accuses Josh Frydenberg of lying about tax as treasurer and shadow treasurer pressed on NDIS in debate; Coalition ‘oblivious’ to pressures facing working families, Albanese says; border force won’t confirm reports of asylum seekers moved to Christmas Island; at least 56 Covid deaths recorded. This blog is now closed

In a move designed to hold on to what is known as the “grey vote”, the government has announced a two-year freeze on deeming rates, in response to the interest rate rise.

That means pensioners with cash deposits which will increase with the rate rise (interest rates on bank accounts go up too) won’t have to worry about hitting the cap of how much they can earn before their pension is impacted.

We have always said where there are good ideas we will support them. We sought to be constructive during the pandemic and did support many of the measures and, you know, looking at this decision today, we have said, yes, this is a good idea and we will.

He already has, we went to a religious service at a local synagogue and no doubt he has many competing requests on his ...

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Shock interest rate rise shows Australia’s economic exceptionalism is fading

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RBA’s decision is, in the words of one economist, ‘a radical revision’. Could this turn a plateauing of property prices into a rout?

In a world of economic shocks, the questions left by Tuesday’s surprisingly large increase in the official interest rate include what will bring the next thunderbolt.

After all, not one of 32 economists surveyed ahead of the Reserve Bank’s monthly meeting predicted the board would emerge with a 25 basis point cash rate increase, finally liberating it from the record low 0.1% it had hovered at since November 2020.

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Election 2022 live updates: RBA chief warns interest rates could hit 2.5% as Labor seizes on ‘cost of living crisis’

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Scott Morrison defends economic ‘shield’ after RBA lifts cash rate target from historic low; Philip Lowe says more interest rate rises to come; Jim Chalmers says central bank decision ‘a very serious development’; nation records 41 Covid deaths. Follow the latest updates live

Scott Morrison doesn’t get sick of the “silly” photo ops [silly photo opportunities being how the question was framed], he tells Melbourne radio’s Neil Mitchell, because he “doesn’t see them that way”.

He then gives a hero-gram to tradies.

I don’t fit in those ways, what I see is [being] out and about and doing what Australians do every day.

... What I enjoy doing is standing there with an apprentice who shows me what they’re learning, and then I’d have a go at it.

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Reserve Bank interest rates: RBA lifts official cash rate to 0.35% in first rise since 2010

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Central bank raises rate by 0.25 percentage points in a move that will stoke cost-of-living debate ahead of federal election

The Reserve Bank of Australia has lifted its official cash rate for the first time in more than 11 years in its first intervention in a federal election since John Howard lost office in late 2007.

The central bank lifted its cash rate target from the record low 0.1% it had hovered at since November 2020, during the depths of the Covid pandemic. It was raised more than expected to 0.35%, and the RBA signalled more rises to come.

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Clive Palmer’s campaign pledge to cap home loan rates ‘utterly irresponsible’, experts say

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United Australia party plan to combat rising rates an ‘just an attention grabber’ and not genuine policy, critics say

Clive Palmer’s centrepiece campaign pledge to cap homeowners’ interest rates for five years has been dismissed by economists as “radical”, “crazy” and “utterly irresponsible” even though it will probably appeal to some gullible voters.

According to the United Australia party’s website, the mining billionaire’s “economic plan for freedom and prosperity” pledges to set a maximum 3% interest rate for all home loans to head off a looming mass default as lending rates start to rise.

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Australia faces prospect of pre-election rate rise as inflation and consumer prices soar

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Annual CPI rate rise to 5.1% was higher than expectations and reflects higher fuel and food costs, sparking fears of an interest rate rise

Australia faces the prospect of a pre-election rate rise by the Reserve Bank after underlying inflation pace soared to its highest in 13 years while the broader consumer price measure increased at the quickest pace since the GST was introduced in 2000.

The 5.1% annual consumer price index (CPI) reading for the March quarter easily topped the market expectation of 4.6% pace. The so-called trimmed mean inflation, which strips out volatile changes and is used by the central bank to set rates, rose 3.7%, or the most since March 2009.

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Australia’s unemployment rate could hit 4% even as cost of living pressures grow

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Economy bounces back from Omicron wave, but economists expect east coast floods to be reflected in March jobs figures

The unemployment rate could hit 4% when the latest labour force figures are released this week, as the economy recovers from the impact of the Omicron variant.

The jobless rate touched 4% in February 2008 and again in August of that year under Kevin Rudd’s Labor government, but has never been lower according to Australian Bureau of Statistics figures stretching back to 1978.

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Australia’s leading economists expect Reserve Bank to hold interest rates low in 2022 | Peter Martin

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Analysis: A panel of forecasters are predicting weaker economic growth and a fall in real wages

Australia’s leading forecasters expect the Reserve Bank to resist pressure to increase interest rates all year, despite rising interest rates overseas, much higher inflation, plunging unemployment and financial market traders pricing in two hikes in the next six months.

The 24-person forecasting panel assembled by the Conversation also predicts weaker economic growth, much lower housing price growth, next to no growth in the Australian share market, little or no further inroads into unemployment and wage growth so weak that real wages go backwards.

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Borrowers rush to lock in low interest rates amid expectations of RBA rise

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Rising house prices and a resurgent economy could nudge the Reserve Bank to raise rates for first time in 11 years

Borrowers are rushing to lock in low interest rates amid gathering expectations Australia’s central bank will declare an end to its record low cash rate earlier than its current prediction of 2024.

Economists say the Reserve Bank of Australia has little choice but to revise its rate rise timing given mounting evidence the economy is recovering quickly from the lengthy Covid-triggered lockdowns in NSW, Victoria and the ACT.

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Coronavirus Australia latest: at a glance

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A summary of major developments in the coronavirus outbreak across Australia

• Follow our Australia coronavirus live blog for all the latest news and updates

• Follow the latest global coronavirus updates in our international live blog

Key Australian developments in the global coronavirus outbreak on Thursday include:

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Reserve Bank boss says coronavirus likely to be worse than Sars for Australian economy

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Philip Lowe says China’s economy is now bigger and more integrated into the world economy so the impact is likely to be greater

The coronavirus outbreak could do more damage to the Australian economy than 2003’s Sars outbreak, governor of the Reserve Bank Philip Lowe has said.

Appearing before the House of Representatives economics committee in Canberra on Friday, Lowe said China’s economy was now much bigger and more integrated into the world economy.

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Reserve Bank may create money to boost economy when rates drop to 0.25%

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Governor Philip Lowe says quantitative easing ‘could help’ but it is ‘not on our agenda at this time’

The Reserve Bank may create money to buy government bonds if it runs out of levers to boost the economy when it drops the official interest rates to 0.25%, its governor, Philip Lowe, has said.

Lowe told the Australian Business Economists dinner in Sydney on Tuesday that quantitative easing “could help” if further interest rate cuts and fiscal stimulus failed to boost the economy although it was “not on our agenda at this point in time”.

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