Treasurer Jim Chalmers is running slightly late. As we wait, the Reserve Bank’s latest cash rate lift is its eighth consecutive increase, delivering an unwelcome quarter-point rise ahead of the expensive Christmas season.
The increase was on par with economist and financial market expectations, and takes the overnight cash rate from 0.1 per cent to 3.1 per cent in just seven months, the fastest tightening cycle in a generation.
At 3.1 per cent, monthly repayments on a 25-year, $500,000 mortgage will have increased by $834 since May, $1251 for a $750,000 mortgage, and $1668 for a $1 million loan, according to comparison website RateCity.
RBA governor Philip Lowe said the bank board expected to increase interest rates “over the period ahead” but would be guided by fresh economic data.
“It is closely monitoring the global economy, household spending and wage and price-setting behaviour,” Dr Lowe said.