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Bigger mortgage payments ahead? The Reserve Bank just raised interest rates.
For the first time in more than three years, the official cash rate is going up. The central bank announced a 25-basis-point bump, pushing the benchmark rate up to 2.5%.
The Reason: Inflation is biting hard, largely driven by supply shocks and global pressures from the Middle East conflict. The Reserve Bank is stepping in to cool things down and protect the economy’s long-term recovery.
The Reality Check: Economists were split on whether this would happen today, but now that the ice is broken, markets are predicting more hikes before the year is out. If you have a variable mortgage, credit card debt, or are looking to borrow, expect costs to start creeping up soon. On the flip side, savers might finally see a bit more love on their deposits.
How is inflation impacting your day-to-day right now? Are you fixing your mortgage rates or riding the wave?
-TIN Bureau