Mortgage Holders Warned of Further Interest Rate Pain Amid Stubborn Inflation

Mortgage holders are bracing for further interest rate increases as economists warn that inflation remains stubbornly high ahead of Wednesday’s official figures. Despite recent signs of a slowdown, the Reserve Bank’s target of 2-3 percent annual inflation rate appears to be slipping further out of reach.

A survey of leading economists conducted by a prominent financial institution found that nearly three-quarters believe interest rates will rise again in the coming months. The warnings come as the nation’s largest banks prepare to increase their standard variable mortgage rates, which could lead to higher repayments for millions of homeowners.

The Reserve Bank has raised interest rates four times since June 2022, with the most recent hike taking the cash rate to 4.1 percent. Economists warn that another rise is likely in the coming months unless inflation shows significant signs of cooling. With household debt levels at a record high and mortgage repayments already straining budgets, further interest rate increases could have far-reaching consequences for the nation’s economic stability.

As the country waits with bated breath for Wednesday’s inflation figures, economists are urging policymakers to take decisive action to curb rising prices. However, some experts argue that higher interest rates may not be enough to bring inflation under control and that more drastic measures may be needed to address the underlying drivers of price growth.

Source: original report.