Australian home borrowers have been dealt a severe blow just before Christmas with the Reserve Bank denying them a rate cut.
The cash rate has remained at 4.35 per cent, which is now higher than the equivalent policy rate in New Zealand and Canada as other first-world nations get relief.
Governor Michele Bullock gave a strong hint rate cuts could be months away with inflation still too high.
‘The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome,’ she said.
The Reserve Bank on Tuesday left the cash rate on hold at its last board meeting for 2024 but stressed the underlying inflation rate of 3.5 per cent was still too high.
While headline inflation is at a three-low low of 2.8 per cent, the RBA is expecting it to surge to 3.7 per cent in late 2025 after the federal government’s $300 electricity rebates expire.
Relief from the RBA’s 13 increases in 2022 and 2023 is also being delayed despite Australia’s economy growing by just 0.8 per cent in the year to September – the slowest growth since the 1991 recession outside of a pandemic.
Australian home borrowers have been dealt a severe blow just before Christmas with the Reserve Bank denying them a rate cut (pictured is a Sydney shopper)
