New data has forced the Reserve Bank of Australia’s hand, triggering expectations of an interest rate rise as soon as next year – two years ahead of the RBA’s plan – as international borders open.
The Australian Bureau of Statistics has released figures this week on rising inflation, has expected to force the RBA to rethink, with experts expecting the central bank to taper off on its uber-stewardship during Covid19, and open up to the idea of rate rises much earlier than the 2024 predicted date.
Over the twelve months to the September 2021 quarter, the Consumer Price Index rose 3 per cent, ABS said, with the most significant price rises coming off new dwelling purchase by owner-occupiers (+3.3 per cent) and automotive fuel (+7.1 per cent).
The RBA has sat on its hands for 130 months without an increase in rates, during which time the housing market has been an absolute powerhouse of activity.
While economists don’t expect the RBA to move immediately on rates, the forecast was for a major change in the next 18 months.
The current official cash rate is 0.10 per cent with the next RBA board meeting set for Tuesday, November 2, the second-last this calendar year and one that’s expected to shift the tone for 2022.
Banks have already begun moving fixed interest package rates higher for terms past the one year mark, including the Big Four – ANZ, CBA, NAB and Westpac – even though they’re at odds over when exactly RBA will hike rates.
Original article realestate.com.au.