Key facts
- The Reserve Bank of Australia is expected to raise its cash rate to 4.6% on Tuesday.
- This would be the highest cash rate level since 2011.
- Typical monthly mortgage repayments for an average new mortgage of $731,000 are expected to increase by about $119.
- Petrol prices have risen 80c since the start of the year, increasing the cost of filling a 55-litre tank by $44.
- Consumer spending on education, motor vehicles, and household goods decreased in August.
- Home prices have fallen more than 4% from their peak earlier this year.
The Reserve Bank of Australia is expected to raise its benchmark cash rate to 4.6% on Tuesday, marking its highest level since 2011. This anticipated move comes amid persistent inflation above the RBA's target range of 3%, despite a weak economy and falling house prices.
Senior RBA staff have recently expressed concern that households may be starting to expect high inflation to endure. Shane Oliver, AMP's chief economist, stated that the central bank risks losing financial market confidence if it does not proceed with another rate hike, as inflation has been above target for over five years.
Financial markets are anticipating further rate increases early next year. The current cash rate stands at 4.35%.