The Reserve Bank of Australia is widely expected to raise interest rates again on Tuesday as global energy shocks push inflation higher.
If economists’ predictions prove correct, the central bank will lift the cash rate target to 4.1%, up from the current 3.85%.
The decision is scheduled to be announced at 2:30pm, with a press conference from RBA governor Michele Bullockexpected at 3:30pm.
Second consecutive rate increase
A rate rise would mark the second consecutive increase after the RBA lifted rates in February.
Central banks around the world are reassessing economic conditions as geopolitical tensions and energy price shocks push inflation higher.
Mortgage pressure growing
For Australian households with mortgages, another rate rise would increase monthly repayments.
According to estimates, someone with a $600,000 mortgage over 25 years would see repayments rise by about $91 per month if the rate reaches 4.1%.
This would add further pressure on households already struggling with rising living costs.
Inflation remains above target
Australia’s inflation rate is currently 3.8%, which is above the RBA’s target range of 2–3%.
Normally, central banks may look past short-term spikes in fuel prices.
However, economists say the latest global energy shock has complicated the outlook.
Global tensions affecting the economy
Rising petrol prices linked to the conflict in the Middle East are adding to inflationary pressures.
Central banks are concerned that if inflation remains high for too long, it could become embedded in consumer expectations.
Economists will also watch whether the RBA board decision was unanimous.
Any signal that another rate rise could happen in May would likely increase pressure on mortgage holders and businesses across Australia.
