The Reserve Bank has lifted the official interest rate to 3.35 per cent as it continues to fight ongoing inflation pressures.
The quarter percentage point lift is a record ninth consecutive increase to the official cash rate by the RBA board. The central bank began hiking rates in May last year, when the cash rate was a historic low of 0.1 per cent.
On a mortgage of $750,000, the increase – if passed on in full by commercial banks – will add $116 to monthly repayments. Since the Reserve started lifting rates, the monthly repayments on a $750,000 mortgage will have climbed by almost $1400.
The bank, which is due to reveal new economic forecasts later this week, has driven up interest rates at a record rate in a bid to reduce the nation’s inflation pressures.
Inflation rose by 7.8 per cent last year, the steepest rise since 1990, driven by rising costs in housing, energy, food and travel. Inflation rose by 7.8 per cent last year, the steepest rise since 1990, driven by rising costs in housing, energy, food and travel.
Ahead of the Reserve Bank’s decision, Treasurer Jim Chalmers said getting inflation down is the government’s number one focus.
“Responsible cost-of-living relief, dealing with workforce shortages and issues in supply chains, at the same time as we show spending restraint. These are the three best ways to deal with the inflation challenge in our economy,” he said.