Following a pause last month, the Reserve Bank of Australia (RBA) has today delivered a shock interest rate hike for May, bringing further cost-of-living pain to households. However Philip Lowe said the decision was needed.
Interest rates rose today by 25 basis points to 3.85 per cent, which has shot the cash rate to an 11-year-high.
The central bank made the announcement this afternoon, with the cash rate the highest they’ve been since April 2012. At the time they were set at 4.25 per cent, following a gruelling 11 month period when they plateaued at 4.75 per cent between November 2010 to October 2021.
Since April 2022, they’ve increased from 0.1 per cent to 3.85 per cent, rising by 375 basis points.
RBA boss Philip Lowe said the hike was “warranted” to return inflation to the RBA’s goal of 2 to 3 per cent.
Dr Lowe also warned “further tightening” may be necessary, indicating future pain for households already struggling with rising cost-of-living pressures.
If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch.