There are mounting calls for Reserve Bank Governor Philip Lowe to resign after he hiked interest rates for the fifth time, just months after he wrongly told the country he wouldn’t hike the cash rate until 2024.
Dr Lowe’s latest 50 basis point jump in the cash rate takes it to a seven-year high of 2.35 per cent, up from an existing six-year high of 1.85 per cent.
The RBA has now inflicted rate rises on mortgage-holders in May, June, July, August and September and has warned that interests rates will almost certainly rise through the rest of the year.
In a television interview on Wednesday, Greens Senator Nick McKim bluntly said Dr Lowe has ‘got it badly wrong’.
‘We’ve got to have accountability in the system. And on that basis alone, Dr Lowe should go,’ he told The Today Show on Wednesday morning.
Calls have mounted for the Reserve Bank Governor Philip Lowe to resign after hiking interest rates for the fifth time this year
His thoughts were echoed by Queensland Nationals Senator Matt Canavan, who said many Australians took on debt under the false promise that interest rates wouldn’t rise for some time.
‘The RBA has failed, there’s no doubt about that, they’ve failed to focus on their job,’ he said.
‘Their job was to control inflation and the last couple of years they have been going to climate change conferences and focusing on diversity and inclusion and not focusing on inflation, which is they are meant to do.
‘I think the RBA governor should have gone when he promised to not raise rates until 2024 and now he’s broken that promise five times.
‘There has to be accountability here. I think it would be better for the RBA to have a fresh start, get some new leadership in.’
Mr Canavan, a member of the Nationals, and the Greens rarely agree, with host Ally Langdon admitting she was shocked to hear the pair were on the same page.
Greens Senator Nick McKim bluntly said Dr Lowe has ‘got it badly wrong’ and ‘should go’
‘I never thought I would live to see the day where Matt Canavan would agree with a Greens Senator!’ she said.
‘We are making history this morning on the Today Show!’
For many Aussies already feeling the pinch from the rising cash rate and hike in fuel prices, they’ve been told more bad news is on the way.
Dr Lowe stated this would be far from the last rate rise during this monetary policy tightening cycle, with inflation in 2022 expected to hit a new 32-year high as consumers kept on spending.
Interest rate rises in 2022
MAY: Up 0.25 percentage points to 0.35 per cent
This ended the era of the 0.1 per cent cash rate and marked the first rate rise since November 2010
JUNE: Up 0.5 percentage points to 0.85 per cent
This was the biggest monthly increase since February 2000 and marked the steepest back-to-back rises since 1994
JULY: Up 0.5 percentage points to 1.35 per cent
This was the first back-to-back increase of 50 basis points since the Reserve Bank began publishing a target cash rate in 1990
AUGUST: Up 0.5 percentage points to 1.85 per cent
SEPTEMBER: Up 0.5 percentage points to 2.35 per cent
‘The board expects to increase interest rates further over the months ahead, but it is not on a pre-set path,’ he said on Tuesday.
‘The size and timing of future interest rate increases will be guided by the incoming data and the board’s assessment of the outlook for inflation and the labour market.’
Treasurer Jim Chalmers told Parliament the latest increase would be ‘very difficult news for a lot of Australians with a mortgage’ – with all the major banks predicting a 50 basis point rate rise for September.
The RBA has now raised the cash rate for the fifth straight month for the first time since it began publishing a target interest rate in 1990. Borrowers have copped rate rises in May, June, July, August and now September of 2.25 percentage points – the steepest series of increases in a calendar year since 1994 (pictured are houses at Paddington in Brisbane)
‘Once again, it isn’t a surprise to anyone – the bank had flagged more increases,’ he said.
‘The fact that we knew that it was coming doesn’t make it any easier for people. This is tough.
‘This will tighten the screws on family budgets. This will put more pressure on a lot of Australians who are already stretched enough.’
A borrower with an average $600,000 mortgage will now be faced with a $173 jump in their monthly mortgage repayments as the central bank battles the worst inflation since 1990 and borrowers deal with the highest cash rate since February 2015.
The latest increase means this borrower would have seen their monthly mortgage repayments surge by $660 since early May.
Australian home borrowers have copped the fifth straight monthly interest rate rise with the Reserve Bank imposing another 0.5 percentage point increase. A 50 basis point increase in the cash rate takes it to seven-year high of 2.35 per cent, up from an existing six-year high of 1.85 per cent