Daily London
Westpac was the first to announce that it would raise its variable interest home loan rates by 0.25 per cent.
The changes will be automatically applied by February 17.
The Commonwealth Bank of Australia also announced it would increase its variable rates by 0.25 per cent.
The move is set to come into effect on February 13.
The central bank’s updated economic forecasts didn’t bode well for borrowers, with inflation not predicted to come back into the 2 to 3 per cent target band until June 2027, and core inflation not tipped to reach the middle of that range for a further year.
But Governor Michele Bullock seemed genuinely unsure about what her bank’s next move will be.
“It is not the same as the tightening cycle when we were coming out of COVID, when we were coming from 0.1 per cent cash rate; it was quite clear that we had to go up and we had to go up quickly,” she said.
“This isn’t as clear.”
CBA’s economists expect another hike in May, taking the cash rate to 4.1 per cent, because there’s unlikely to be enough evidence by then to show today’s hike is slowing demand.
“Inflation is simply too high for the RBA at this stage, and the central bank has signalled a stronger resolve to bring it back within target,” Commonwealth Bank head of Australian economics Belinda Allen said.
NEVER MISS A STORY: Get your breaking news and exclusive stories first by following us across all platforms.
