Westpac forecasts a bigger 0.5 percentage point interest rate rise in November
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Westpac Issues Chilling Warning Of Superb Interest Rate Rise Coming NEXT WEEK, As Inflation Soars At Fastest Pace In 32 Years
- Westpac predicts a 0.5 percentage point rate hike on November 1
- The only Big Four bank to explicitly forecast a 50 basis point increase next week
- ANZ, NAB see bigger rate hike as deadweight still forecasts 25 basis points
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Westpac is the first major bank in Australia to explicitly forecast a larger interest rate hike of 0.5 percentage points next week.
Should that bigger surge occur on Melbourne Cup Day, a borrower with a typical $600,000 loan will see their monthly repayments increase by an additional $181.
In the period to September, inflation rose by 7.3 percent – the fastest rate since 1990.
This has led Australia’s Big Four banks to adjust their interest rate forecasts for the Reserve Bank of Australia, with borrowers already experiencing the steepest rise in mortgage repayments since 1994.
Westpac is the first major bank in Australia to forecast a larger 0.5 percentage point rate hike next week (Sydney branch shown)
Westpac is the first of the banking banks to explicitly forecast a larger half percent hike in spot interest rates on Nov. 1, which would take it to a new 10-year high of 3.1 percent from an existing nine-year high of 2.6 per year. cent.
“The September quarter inflation report is such a big surprise that we believe the Reserve Bank board will decide to raise cash rates by 50 basis points at the next board meeting on Nov. 1,” said Bill Evans, chief economist at the couch.
Should that prediction come true, a borrower with an average mortgage of $600,000 would see their monthly repayments increase by $181 from $3,055 to $3,236.
Westpac now expects the Reserve Bank to continue raising interest rates until they peak at 3.85 percent in March 2023, up from a previous forecast of 3.6 percent.
ANZ and NAB consider a 0.5 percentage point increase on November 1 an opportunity, but a 0.25 percentage point increase is still more likely.
The RBA has raised spot interest rates in six consecutive monthly meetings since May, marking the fastest rate of monetary tightening since 1994.
Inflation in the year to September rose 7.3 percent – the fastest pace since 1990
A seventh hike in November, regardless of size, would be the highest in a row since the Reserve Bank published a target interest rate in 1990.
The Australian Bureau of Statistics released new inflation data for September on Wednesday, showing that the consumer price index grew at an annual rate of 7.3 percent – the strongest increase since June 1990.
General inflation is more than double the Reserve Bank’s target of two to three percent, with gasoline prices rising 18 percent annually, while fruit and vegetable prices rose 16.2 percent.