RBA Squeezed as Borrowers Feel Pinch of Rising Fuel Costs

Australian households are facing significant pressure from rising fuel and grocery costs beyond their control, according to economic director David Koch at Compare the Market. The company has urged the Reserve Bank of Australia (RBA) to hold interest rates steady at its August meeting.

The RBA has already increased the cash rate by 25 basis points three times this year, leaving borrowers with little room to absorb further rises. A further 25-basis-point increase would add approximately $120 to monthly repayments on a typical loan of $735,000.

Koch said that cost pressures on households are driven by factors outside their control, rather than consumer spending. He expects the RBA to hold rates at its August meeting but cautioned that borrowers should not assume the pressure has passed.