Australia's OCR on hold when NZ's is set to soar! - Property News AU/NZ | propertynoise.co.nz & propertynoise.com.au

PHOTO: Australian OCR. GETTY

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RBA holds cash rate at 0.1 per cent despite inflation rising faster than expected

The Reserve Bank of Australia has kept the official interest rate on hold at its first meeting of the year, despite inflation rising faster than its expectations.

At its monthly meeting on Tuesday, the RBA board also agreed to end its quantitative easing program after its final bond purchases on February 10, but stated that this won’t necessarily translate to a near-term increase to interest rates.

OCR increases and rising home loan interest rates mean households are going to have to adjust

But experts believe mounting inflation pressures mean it’s only a matter of time before the central bank lifts the cash rate target, with many economists now predicting a rise before the end of the year.

“While we don’t know precisely when it will come, it’s definitely going up at some point, so households should start gearing up now for that likelihood,” said HSBC economist Paul Bloxham.

“While the Reserve Bank originally said it wouldn’t rise until 2024, it’s quite clear it will happen before that, and it could be as soon as this year, but more likely in early 2023. People now have to start factoring that into their decision-making.”