Millions of Australian borrowers are facing financial difficulties following the latest rate hike by the Reserve Bank of Australia (RBA), according to a leading economist. The RBA increased the cash rate by 25 basis points to bring it to 4.1%. This is the highest rate in over 11 years, and for the average homeowner with a mortgage, monthly repayments will increase by approximately $77. The rate hike is the twelfth since last May, and many Australians with mortgages are already struggling. Some people are spending frivolously and driving inflation up, while others are saving money. The RBA argues that high spending rates lead to higher inflation rates, while large amounts of savings are devalued by high inflation rates. The RBA warned that further rate hikes may be necessary to bring inflation back to target levels.
Borrowers Prepare for Financial Strain Following Reserve Bank of Australia’s Recent Interest Rate Increase
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