Philip Lowe’s latest message to Australia as Reserve Bank boss issues a new interest rate warning
- Philip Lowe made the last parliamentary appearance
Outgoing Reserve Bank governor Philip Lowe has warned that further rate hikes are possible – he admits that the mortgage payment hikes were unpopular, but argued inflation would otherwise have been higher.
He told a House of Representatives economics committee that he was not afraid of being unpopular.
“It’s not popular, but we’ll do whatever it takes,” he said on Friday.
Australian home borrowers have endured the most aggressive pace of rate hikes since 1989 with 12 increases since May 2022 that have pushed cash rates to an 11-year high of 4.1 per cent.
“Interest rates have risen tremendously, who knows what will happen in the future, but we will not see the kind of rate hikes we have seen over the past year,” said Dr Lowe.
“That pressure will go away.”
He made the suggestion after indicating in 2021 that interest rates would remain at a record low of 0.1 percent “at the earliest” in 2024.
Dr. Lowe, whose seven-year term ends on Sept. 18, promised wage growth would outpace inflation by 2024 and suggested that the cost of living would weigh less on young people.
“I think we’re going to see a more equal experience in the next 12 months than we’ve had in the last 12 months,” he said.
Outgoing Reserve Bank Governor Philip Lowe (left with his deputy and successor Michel Bullcok) has acknowledged his rate hikes were unpopular, but argued inflation would otherwise have been higher