Reserve Bank leaves interest rates at 4.1 per cent

The Reserve Bank have left the official cash rate on hold for a fourth month but hasn't ruled out future increases to reign in inflation.

Transcript

00:00 What we've come to learn in the past year is that the absence of worse news now equates

00:08 to good news.

00:09 And while we often say that when interest rates are put on hold, this comes as a relief

00:14 to borrowers, but it doesn't actually do a whole lot to ease the stress that they're

00:19 currently under.

00:20 The decision to keep rates at 4.1% is the fifth time the RBA has hit pause on its current

00:27 rate hiking cycle, which began in March 2022 to combat inflation.

00:33 And while monthly inflation during August did rise due to rising petrol and housing

00:39 costs, that underlying inflation has continued to decrease.

00:43 But considering the cash rate is at its highest since April 2012, yesterday's announcement

00:49 could provide little comfort for those borrowers who are already struggling under higher repayments.

00:56 Now Financial Comparison Services, MOZO, estimates that one in six Australians are currently

01:02 spending between 40 and 60% of their monthly household incomes on their home loans.

01:09 They also say that one in three mortgage holders have actually never refinanced despite holding

01:16 their mortgages for more than a decade.

01:19 Now MOZO spokesperson Rachel Westel says that's something people should start to consider

01:24 right now.

01:26 Even though the RBA has left the cash rate on hold, obviously monetary policy does work

01:32 at a lag.

01:33 So those rate rises that have been coming since last year are still filtering through

01:38 to the economy.

01:39 And it's important, especially as we have seen some lenders cutting rates, that if you

01:45 haven't refinanced, it is a good time to shop around.

01:50 Now an interesting point from yesterday's meeting, which was the first of the new RBA

01:57 Governor Michelle Bullock, was that she was careful to not rule out any future rate hikes

02:04 in the efforts to continue to combat inflation.

02:08 And currently economists say that you can't expect to see any rate decreases for at least

02:13 another 12 months.

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