Consumer price inflation rose by 1.8% in the June quarter, and by 6.1% on a rolling 12-month view. Whilst high, these measures were below consensus expectations. In turn, this prompted hopes that local interest rates might not need to increase as much as previously feared.
Australia has a high level of household debt, with a large- proportion of borrowers on variable-rate mortgages. Rate hikes can therefore be
particularly painful for Australians.
Policymakers therefore have a challenging task, balancing the need to dampen inflation through tighter monetary policy settings, without
strangling growth by crippling homeowners with sharply rising mortgage re- payment costs.
The Reserve Bank of Australia raised rates again on 1 November, by a further 0.25 percentage points. Official interest rates are now
2.85% and may be raised again in December.
Things to consider before investing in multigenerational living. What do rising geopolitical tensions mean for investment markets? This and more in Issue 16 of SMART Life.
