A day after interest rates were raised for the third month in a row, millions of homeowners have been warned of a triple blow.
Homeowners have been warned to brace themselves for a trespass of a third 0.5 percentage point hike in cash interest rates next month amid looming price hikes for gasoline, fruits and vegetables.
If forecasts are correct, the move would push official interest rates from current levels of 1.35 percent to 1.85 percent, in the most aggressive round of rate hikes since the 1990s.
Since the RBA began lifting rates in May, the cumulative increase in repayments on a $400,000 mortgage is now $275 per month or $550 for an $800,000 mortgage.
Treasurer Jim Chalmers warned mortgage holders to expect further rate hikes as the Reserve Bank tries to contain rising inflation.
“Look, we’re not anticipating decisions by the independent Reserve Bank, but the governor has made it clear… that more rate hikes will follow,” said Dr Chalmers.
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“And that’s because this inflation challenge in our economy is going to get harder before it gets easier.”
The Albanian government has warned families struggling with rising costs that gasoline prices will rise in September with no plans to extend the temporary cut in fuel taxes.
“We’ve tried to be candid with people and tell them not to expect the gasoline price cut to last forever,” the treasurer said.
Messages are also expected to rise further as a result of the current flood disaster in NSW. Prices have already risen in the wake of the February floods in Queensland and NSW.
“Our expectation is that these floods will make the cost of some basic necessities, some fruits and vegetables even more expensive at a time when prices for those commodities are already skyrocketing,” said Dr. Chalmers.
“And that makes fruit and vegetables more expensive at a time when they are already expensive enough.”
The official spot rate hike to 1.35 percent on Tuesday marks the third straight month that rates have been hiked and the second straight month by 50 basis points.
The May surge marked the first time in 11 years that the Reserve Bank raised interest rates.
RBA Governor Philip Lowe said Australians should expect more rate hikes.
“Today’s rise in interest rates is a further step in the withdrawal of the extraordinary monetary support instituted to help insure the Australian economy against the worst possible effects of the pandemic,” he said in a statement after the RBA meeting. from Tuesday.
And while some analysts are forecasting a 25 basis point increase in August, others are proposing a third straight month of gains of 0.5 percent.
However, there is good news: the treasurer does not believe that a recession is likely.
“Neither the Treasury nor the Reserve Bank predict a recession in Australia,” said Dr Chalmers.
“The way I look at it is that our economy is growing, but so are our challenges. I am confident in the long-term outlook for the Australian economy as long as we do our best to cope together with this difficult combination of circumstances that we are now facing.”