More pain for mortgage holders could be on the way after the Reserve Bank of Australia warned it would be some time before the board would have “sufficient confidence” inflation will ease within a reasonable time frame.
The RBA on Tuesday released the minutes of its February meeting where it left the official cash rate – which guides interest rates set by lenders – on hold at 4.35 per cent.
The minutes showed the central bank mulled over whether to raise the cash rate further.
In the end mortgage holders were spared from another increase but the RBA warned it didn’t spell the end of hikes altogether.
“Uncertainty about the outlook for the economy was high,” the minutes said.
“Members also observed that the costs of inflation not returning to target within the envisaged time frame were potentially very high.
“Given this, members agreed that it was appropriate not to rule out a further increase in the cash rate target.”
More to come.
