Australian home borrowers have been dealt a Melbourne Cup blow By Stephen Johnson, Economics Reporter For Daily Mail Australia Published: 02:16 EST, 5 November 2024 | Updated: 02:19 EST, 5 November 2024 e-mail Advertisement Australian home borrowers have been dealt a Melbourne Cup blow - with a new warning about inflation and another possible rate hike as they missed out on relief yet again. The Reserve Bank kept the cash rate untouched at a 12-year high of 4.35 per cent on Tuesday afternoon, and warned inflation would not 'sustainably' moderate until late 2026.
That would also occur after inflation soared again next year, following the expiry of temporary $300 electricity rebates from the federal government. Australians face higher interest rates for longer, even though economic growth is at historically weak levels. 'Policy will need to be sufficiently restrictive until the board is confident that inflation is moving sustainably towards the target range,' the RBA said.
The Reserve Bank has also warned it could still raise rates, despite borrowers in Canada, New Zealand, the European Union, U.S. and UK already getting some relief this year.
'This reinforces the need to remain vigilant to upside risks to inflation and the board is not ruling anything in or out,' the board said. Governor Michele Bullock (pictured) left open the possibility of another rate rise, even though financial markets aren't betting on a hike in Australia, because services inflation is still at high leve.