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Australian homeowners will be hit by FOUR more interest rate hikes before August as the government comes under fire for devastatingly high inflation: ‘The honeymoon is over. What are you gonna do about it?’
- The Reserve Bank forecasts raising interest rates
- Deutsche Bank plans four more rate hikes
Interest rates could rise a further four times before the end of August, dealing a massive blow to millions of Australians.
Deutsche Bank has made the dire forecast by predicting that the Reserve Bank of Australia will raise rates by a quarter of a percent in February, March, May and August.
The increases would bring the official cash rate to 4.1 percent, which would mean more pain for homeowners.
Residents with a $500,000 mortgage will be forced to pay an additional $250 per week.
Interest rates could rise a further four times before the end of August in a major blow to millions of Australians.
Government services minister Bill Shorten admitted he was “worried about the people who are going to make it difficult this year.”
“It is clear that our earlier expectation of a 3.35 percent terminal rate for Australia is insufficient,” Deutsche Bank chief economist Phil O’Donaghoe said.
‘We now expect the RBA cash rate to rise to 4.1 percent in August, with increases of 25 basis points in February, March, May and August.
“In other words, we added 75 basis points of upside to our previous RBA terminal call.”
Mr. O’Donaghoe predicts that the unemployment rate will increase from 3.5 percent to 4.5 percent in the next 12 months.
Some 100,000 people are expected to lose their jobs.
Government Services Minister Bill Shorten admitted he was “worried about people who are going to have a tough time this year.”
“If the Reserve Bank tries too hard, I think it’s a big problem for a lot of people,” he told Channel Nine’s Today on Tuesday.
Host Karl Stefanovic demanded to know how Mr. Shorten intended to help ease the financial pressures facing thousands of families.
Today, host Karl Stefanovic demanded to know how Mr. Shorten intended to help ease the financial pressures facing thousands of families.
Shorten said the government was already tackling the problem by cutting child care costs, addressing underfunding of Medicare and improving wages.
3AW radio host Neil Mitchell weighed in to criticize Mr Shorten and question what changes would be made any time soon.
“You are very quick to blame the previous government,” he said. ‘The honeymoon is over guys, accept it.’