Inflation surprise: What do new figures mean for home loan interest rates?
Today's figures could have just decided what happens with the RBA cash rate next week.
Although we had all started to feel optimistic about next week's cash rate decision, figures out today paint a complicated picture for the Reserve Bank of Australia (RBA).
At the start of October, economists and experts were mostly predicting the RBA would hold the cash rate in November. But when higher than expected unemployment figures were released earlier this month, people began to talk about a possible rate cut.
It all came down to the inflation figures released today.
Need a better home loan rate?
Don't wait for a cash rate cut, compare loans for a better rate.
Pesky inflation causing problems again
Unfortunately, annual inflation is at its highest since the June 2024 quarter. It now sits slightly above the RBA's target range, at 3.2%.
This means we're probably not getting the rate cut everyone was hoping for.
You might be wondering why we're talking about rising inflation again. The RBA spent almost 2 years increasing rates to bring inflation down. We finally got to the 2% to 3% range and that's why the RBA began cutting rates.
It's a delicate balance to keep inflation where it's meant to be, though, and the RBA won't want to upset it too soon.
So although inflation has risen slightly it's probably not enough to spark another rate increase... but it has been mentioned.
For now, the RBA will likely keep the rates on hold and hope that inflation slows again.
If you're struggling with your home loan repayments and were holding out for a rate cut in November, you can still give yourself a rate cut by refinancing to a lower rate. Compare fees and features as well to make sure it's the right switch for you.
Sources
Ask a question