No change in interest rates at Bullock’s first meeting – on hold at 4.1 per cent

Stretched borrowers have been spared more mortgage pain as the Reserve Bank board chooses to leave interest rates on hold at 4.1 per cent.

The October decision marks the fourth month on the sidelines after an intense series of interest rate hikes.

The call was broadly expected despite inflation bumping higher in August.

The meeting was the first under the leadership of the new governor, Michele Bullock, who took over from Philip Lowe last month.

In a post-meeting statement, Ms Bullock kept the door open to more increases, if needed.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks,” she said.

“In making its decisions, the board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market.”

The chances of a final hike before the end of the year has been moving higher after a worrying set of inflation numbers in the monthly consumer price index.

The headline number lifted 5.2 per cent annually in August, up from 4.9 per cent in July.

The RBA board has opted to keep monitoring the situation and wait patiently for the full set of quarterly inflation numbers due later in the month.

Borrowers are already feeling the 12 interest rate hikes fired off since last year.

Record numbers of mortgage holders have been deemed at risk of mortgage stress based on a Roy Morgan survey – a categorisation that takes into account monthly repayments as a percentage of income and spending.

More than 30 per cent of mortgage holders, or 1.57 million, fell into this at-risk category over the three months to August.


Poppy Johnston
(Australian Associated Press)


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