Time to start preparing for a winter rate rise

Speculation around interest rate rises

The RBA today announced that interest rates will be held.  However, an acknowledgment of the “sharply” increasing inflation was noted.  The RBA discussed the upswing in business investment, the large construction pipeline along with household and business budgets appearing steady.  However, the Board took a cautious approach preferring to see evidence that inflation is sustainable before increasing interest rates.

 In the coming months, the RBA will examine both inflation and labour costs with the objective of wages and employment growth.  Economists have started speculating when the first-rate increase will come.  The general consensus is after the June quarter, therefore, giving Australians until August to continue to enjoy the current 0.10% cash rate. While the winter chill keeps many of us indoors it could be a good time to spend that downtime locking in some attractive interest rates and reviewing the budget to ensure you are prepared for whatever is over the horizan.