Interest Rates Highlights
The Reserve Bank of Australia (RBA) has lifted the cash rate for the first time since 2010, by 0.25 per cent, in response to the growing inflation levels. Perth has recorded the most significant inflation rates in Australia over the last year, hitting a 20-year high since 1990.
The spike in inflation can be attributed to several factors, with the top contributors being the surging cost of fuel and homebuilding expenses. The price of petrol has jumped more than 35 per cent from mid-pandemic lows while dwelling prices increased by over 13.7 per cent.
The inflation swell is a result of the prolonged period of COVID-stimulus packages, disruption in logistics, and shortages in the supply chains nationwide. Phillip Lowe, RBA governor said that inflation has risen faster than the banks anticipated, and more rate hikes can be expected. Lowe believes that interest rates will revert to 2.5 per cent in upcoming months, returning to about 3 per cent by mid-2024.
Sources – Business News | The Morning Star | The West Australian | ABC News
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