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RBA Interest Rates Announcement June 2023

RBA Interest Rates Announcement

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The Reserve Bank of Australia (RBA) has increased interest-rate for the 12th time within 12 months, and the cash rate is now 4.10%. The RBA has flagged that more interest-rate rises may follow because inflation is not under control.

The RBA is concerned as the Consumer Price Index (CPI) unexpectedly leapt to 6.8% in April from 6.3% earlier. In addition, the labour market remains tight and recent wage increases are leading the RBA to believe that inflation may be persistent and further rate rises are required.

Also, the RBA sees wage increases occurring against poor improvement in productivity. This means wages are increasing in the eyes of the RBA, but workers’ value or output is not. As such, suppliers are getting costlier to produce goods and services, leading to higher prices and inflation.

RBA Interest Rates Announcement

RBA Interest Rates

In addition, house prices have bottomed out and are now starting to push higher. Applications for home loans have stopped declining. Mortgage broker What If We Finance has seen a pronounced increase in home loan applications.

Independent mortgage broker What If We Finance has seen investors come back into the market as increasing rents are becoming, and renters have decided they are better off buying a home than paying exorbitant rent.

These factors contribute to inflationary pressures in the eyes of the RBA, and they believe further action may need to be taken. The RBA has said Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve.”

The RBA aims to ensure that the current inflation rate returns to its 2-3% target by mid-2025 (2 years from now).

The looming fixed-rate mortgage cliff and rising interest rates create appreciating pressure on some home loan borrowers. If the rate hikes are a concern, mortgage broker Melbourne, What If We Finance, is here to help.

We will work with you to understand your current financial situation and help you feel. Find a better deal on your home loan.

Contact What If We Finance today to find out more.

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