{"id":38965,"date":"2022-06-07T17:46:46","date_gmt":"2022-06-07T05:46:46","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=38965"},"modified":"2022-06-07T17:46:46","modified_gmt":"2022-06-07T05:46:46","slug":"biggest-one-month-lift-in-interest-rates-for-22-years","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/biggest-one-month-lift-in-interest-rates-for-22-years\/","title":{"rendered":"Biggest one-month lift in interest rates for 22 years"},"content":{"rendered":"

PHOTO: The Reserve Bank of Australia<\/strong><\/p>\n

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The Reserve Bank has made the biggest one-month increase in official interest rates in more than two decades in a bid to address higher than expected inflation.<\/p>\n

RBA governor Philip Lowe announced the new cash rate of 0.85 per cent, up by half a percentage point, following the board\u2019s June meeting on Tuesday afternoon, saying inflation was tracking higher than expected.<\/p>\n

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RBA governor Philip Lowe says inflation is higher than earlier expected <\/span>CREDIT: <\/span>LOUIE DOUVIS<\/cite><\/strong><\/em><\/p>\n<\/figcaption><\/figure>\n

\u201cWhile inflation is lower than in most other advanced economies, it is higher than earlier expected,\u201d he said. \u201cThe board expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead.\u201d<\/p>\n

It\u2019s the biggest one-month increase in the official cash rate since February 2000 and only the second rise since November 2010, after the bank last month lifted the cash rate from a record-low 0.1 per cent to\u00a00.35 per cent in the lead-up to the federal election.<\/p>\n

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That was the first time the bank had intervened during an election campaign since 2007, but the RBA had flagged it was the start of a series of rises as it\u00a0returns rates to a \u201cmore normal\u201d level.<\/p>\n

Economists and banks\u00a0had expected a step-up of\u00a0either 0.25 or 0.4 percentage points to address inflation, which\u00a0grew to 5.1 per cent in the 12 months to March.<\/p>\n

Last month, Lowe said cost-of-living pressures would continue to grow in the coming months, and inflation was expected to reach 6 per cent.<\/p>\n

But on Tuesday, he said inflation was now expected to increase further, before declining back towards the bank\u2019s target 2 to 3 per cent range next year.<\/p>\n

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Treasurer Jim Chalmers said the RBA\u2019s move would be hard news for mortgage holders.<\/p>\n

\u201cDifficult news for homeowners already facing skyrocketing costs of living, including spiking energy prices,\u201d he tweeted shortly after the announcement on Tuesday afternoon.<\/p>\n

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