The Reserve Bank of Australia has delivered a shock 12th rate hike since May last year, deciding to lift interest rates in a bid to tackle persistently high inflation.
The central bank chose to lift the cash rate target by 25 basis points to 4.10 per cent, surprising the financial markets and the majority of economists who predicted a pause on rate hikes in June.
For the average Australian mortgage, today’s rate hike represents an additional $1,264 in mortgage repayments since the cash rate was 0.10 per cent in April 2022.
Australia’s base interest rate level is now at it’s highest point since April 2012.
In his monetary statement RBA Governor Philip Lowe said today’s increase was a necessary step to contain inflation.
“Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range,” Lowe said.