The cash rate has been raised by another 25 basis points to 4.10%, the highest point since April 2012, where it was 4.25%.
While the RBA has acknowledged the pressure high rates are putting on mortgage holders, inflation remains persistently high, while last week's decision from the Fair Work Commission to increase the minimum wage award by 5.75% raised concerns about a price/wage spiral.
RBA Governor Philip Lowe said that while the labour market has began to ease, conditions are still very tight, and wage growth has also picked up.
"Growth in public sector wages is expected to pick up further and the annual increase in award wages was higher than it was last year," he said.
Dr Lowe said that combatting inflation remains his overwhelming priority, and this most recent increase is necessary to continue bringing inflation back towards target levels.
He also hinted further increases could be needed, depending on the next few months.
The board will monitor developments in the global economy, household spending, inflation and the labour market in the coming weeks, all of which will inform July's decision.
'Every rate rise leads to job losses'
The Australian Council of Social Services (ACOSS) immediately released a statement condemning the cash rate rise.
"Inflation is a serious challenge that needs to be tackled, but without deliberately tanking the economy and driving people out of work," says CEO Edwina Macdonald.
"Instead of relying on the blunt tool of interest rate hikes, the government should be tackling inflation directly by better regulating the rental market and taking further action to reduce energy and healthcare costs."
Even prior to today's announcement, ACOSS were predicting unemployment to reach 4.5% by July 2025, which translates to 130,000 Australians losing their jobs.
Property market to hold up?
Higher borrowing costs saw record drops to property prices throughout the second half of 2022, but the market has rebounded this year, contrary to expectation.
PropTrack Senior Economist Eleanor Creagh believes this latest rate rise won't stop property prices continuing to grow.
"After five consecutive months of national home price growth, stronger market conditions are more pervasive, and price rises are more widespread.
"Strong demand relative to stock on market is seeing home prices lift, and offsetting the downward pressure from continued interest rate rises."
More to come...
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.08% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 Star Customer Ratings |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure | |||||||||
6.09% p.a. | 6.11% p.a. | $3,027 | Principal & Interest | Variable | $0 | $250 | 60% |
| Promoted | Disclosure |
Picture by baby okra on Unsplash
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Dominic Beattie
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