The Commonwealth Bank has lifted its interest rates on home and business loans by 0.1 percent in order to offset higher funding costs, with other major lenders predicted to follow suit.
The rate on its standard variable loans will rise to 5.74 percent from 5.64 percent.
The move has been criticised by the Federal Government, with Treasurer Wayne Swan calling the hike “selfish” while Deputy Prime Minister Julia Gillard said she was “furious” with the decision.
“The Government has been acting to stimulate the economy to support Australian jobs, the Reserve Bank has been decreasing interest rates once again to spur activity and here we have the Commonwealth Bank acting in completely the reverse direction. This is a decision the Government is rightly furious about and one we are describing as selfish because that’s precisely the right word.”
Analysts are predicting other major lenders will follow suit, with NAB predicted to lift their rates, while ANZ and NAB have stated rates were “constantly under review.”
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