RBA Rate Hike Looms as Inflation Figures Rise

The Reserve Bank of Australia (RBA) may be forced to raise interest rates again to combat stubborn inflation, according to major banks ANZ and Westpac. The trimmed mean inflation figure for the June quarter is expected to rise by 0.9 per cent, which would put pressure on the RBA to hike rates in August.

This would lead to higher home loan repayments, with Canstar calculating a further $92 monthly increase for a $600,000 loan off any such move. The cumulative increase across four rate hikes since February would bring monthly repayments on a $600,000 mortgage to $4,052, up from $3,958.

Canstar Data Insights Director Sally Tindall said there has been no inflation reward for everyday Aussies despite years of extreme budgeting. She warned that banks may hike mortgage rates again if the RBA raises interest rates, citing rising unemployment and depressed consumer confidence as factors contributing to the inflation problem.