Aird said this delay would probably have a macroeconomic impact.
“There is a lag between changes in the cash rate and the impact it has on monthly cash flow for borrowers on a floating rate mortgage,” he said.
“At CBA, for example, by December the impact of already announced rate rises on monthly cash flow for mortgage holders on variable rate loans will be a four-fold increase compared to July.
“As such, there is a strong case to slow the pace of rate rises given we expect consumption growth to slow significantly as the lagged impact of rate hikes impacts many households.”
Financial markets expect the official cash rate to peak at 3.6 per cent by March and then edge down by Christmas 2023.
The RBA board has six meetings between now and March. To reach 3.6 per cent, it would have to lift the cash rate by half a percentage point at one meeting and then a quarter percentage point at each other meeting.
It would amount to the fastest, and most aggressive, increase in interest rates since before the 1990-91 recession, when the bank had interest rates at 17.5 per cent.
Aird, who was one of the first economists to tip the RBA would start tightening monetary policy in 2022, believes the central bank – which has increased rates by half a percentage point at its last three meetings – may slow its increases to a quarter of a percentage point.
He said official interest rates would probably peak at 2.6 per cent before the RBA cut them in the second half of next year, predicting a combined half percentage point reduction in the cash rate at that time.
Data from National Australia Bank suggests the combination of higher interest rates and inflation is starting to bite.
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Its measure of financial hardship showed the proportion of Australians struggling with the cost of living rose sharply to 35 per cent in the June quarter. It was at a survey-low of 29 per cent in the March quarter.
Hardship is most widespread in Western Australia, at 43 per cent, and has been climbing in the state since the start of last year. Inflation in Perth is at a nation-high of 7.4 per cent.
The biggest increase in hardship was in NSW and ACT, where it jumped from 26 per cent to 38 per cent.
NAB’s personal banking group executive, Rachel Slade, said while most of the bank’s customers were in a good financial position, there were some pockets of concern.
“Seventy per cent of NAB customers are ahead on their home loan payments but we do know there are some people who are feeling the pressure of an increased cost of living,” she said.
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