© 2021 Greek Community Tribune All Rights Reserved

RESERVE BANK GOVERNOR WARNS

Prepare for interest rate hike

25 June 2022 The Reserve Bank governor has warned Australians they need to be prepared for substantial interest rate rises over the rest of this year, conceding he is not sure how high they might go. In an interview on ABC’s 7.30, his first public remarks since hiking rates by half a per cent, Philip Lowe (pictured right) said he expected inflation could hit 7 per cent by Christmas and predicted it would not fall until the first quarter of next year. At a time when Australians are already grappling with rising fuel, power and grocery prices, he declared the RBA would do “what’s necessary” to get inflation back to between 2 to 3 per cent. “It’s unclear at the moment how far interest rates will need to go up to get that,” Dr Lowe said. “I’m confident that inflation will come down over time but we’ll have to have higher interest rates to get that outcome.” Dr Lowe added that it was “reasonable” to think interest rates would reach about 2.5 per cent at some point, stressing they had been at emergency levels in response to the COVID-19 pandemic and needed to gradually return to normal. Under such a scenario, a family with a $500,000 mortgage would likely have to pay more than $500 a month more than they were a few weeks ago. The RBA governor conceded some families were already struggling to make ends meet and would find the increase in repayments tough. A drop in house prices will hit soon, however, Dr Lowe said “we’re not worried that declines in housing prices will affect the banking system.” With an interest rate hike looming in the lead up to Christmas 2022, economy experts are advising the Australian public to be careful how they spend and especially how they borrow.
Greek Tribune Adelaide, South Australia
© 2021 Greek Community Tribune All Rights Reserved

RESERVE BANK GOVERNOR WARNS

Prepare for interest rate hike

25 June 2022 The Reserve Bank governor has warned Australians they need to be prepared for substantial interest rate rises over the rest of this year, conceding he is not sure how high they might go. In an interview on ABC’s 7.30, his first public remarks since hiking rates by half a per cent, Philip Lowe (pictured right) said he expected inflation could hit 7 per cent by Christmas and predicted it would not fall until the first quarter of next year. At a time when Australians are already grappling with rising fuel, power and grocery prices, he declared the RBA would do “what’s necessary” to get inflation back to between 2 to 3 per cent. “It’s unclear at the moment how far interest rates will need to go up to get that,” Dr Lowe said. “I’m confident that inflation will come down over time but we’ll have to have higher interest rates to get that outcome.” Dr Lowe added that it was “reasonable” to think interest rates would reach about 2.5 per cent at some point, stressing they had been at emergency levels in response to the COVID-19 pandemic and needed to gradually return to normal. Under such a scenario, a family with a $500,000 mortgage would likely have to pay more than $500 a month more than they were a few weeks ago. The RBA governor conceded some families were already struggling to make ends meet and would find the increase in repayments tough. A drop in house prices will hit soon, however, Dr Lowe said “we’re not worried that declines in housing prices will affect the banking system.” With an interest rate hike looming in the lead up to Christmas 2022, economy experts are advising the Australian public to be careful how they spend and especially how they borrow.
Greek Tribune Adelaide, South Australia