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August Interest Rates Unchanged (2023)

August Interest Rates

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Interest Rates Unchanged August 2023

The RBA has left interest rates on hold. At the meeting today, the RBA left the official cash rate unchanged at 4.10%.

Interest rates have increased by 4.00% pa since May last year. For some individuals borrowing capacity may have fallen by $300,000 – $400,000, and interest costs on a $500,000 mortgage have increased by $20,000 per annum or $600,000 in additional interest costs over 30 years.

Unchanged interest rates RBA

The RBA, as part of its announcement, said “4 percentage points have increased interest rates since May last year".

The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month.

This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook.
Inflation in Australia is declining but is still too high at 6 per cent. Goods price inflation has eased, but the prices of many services are rising briskly. Rent inflation is also elevated.

The central forecast is for CPI inflation to continue to decline, to be around 3¼ per cent by the end of 2024 and to be back within the 2–3 per cent target range in late 2025.
The Australian economy is experiencing a period of below-trend growth, and this is expected to continue for a while.

Household consumption growth is weak, as is dwelling investment. The central forecast is for GDP growth of around 1 and three-quarter per cent over 2024 and a little above 2 per cent over the following year.”

In summary, while inflation is falling, it needs to fall faster, and the RBA will consider increasing interest rates again.
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If these rate movements worry you, contact What If We Finance, Melbourne’s best mortgage broker.

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