The Reserve Bank’s decision to lift interest rates to 3.25 percent has been met with mixed reactions.
Governor of the RBA, Glenn Stevens commented on the rise stating “the basis for such a low interest rate setting has now passed” with recovering global markets and better than expected economic conditions in Australia.
The decision to lift interest rates so early has surprised some. The National Bank of Australia originally predicted rate rises for November and December. However, NAB still anticipates a series of two additional rate rises in successive meetings to bring the cash rate to 3.75 percent by the end of the year.
Mortgage Choice senior corporate affairs manager, Kristy Sheppard also commented on the increase saying borrowers should prepare themselves for future rate rises.
“Borrowers should prepare themselves for a festive season featuring higher mortgage repayments and know where to look for signs of upcoming interest rate movements,” she said.
Meanwhile the Australia National Retailers Association voiced disappointment in the decision, stating retail recovery and increased consumer confidence could be upset by interest rate rises.
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