RBA to gradually increase rates to avoid mortgage shock top economists predict
An increase in household debt during the COVID-19 recession will force the Reserve Bank to only gradually increase borrowing costs, the nation's leading economists believe, although they warn official interest rates could easily climb above 3 per cent. Ahead of the RBA's March meeting on Tuesday, most economists in The Sydney Morning Herald/The Age Scope survey expect rates to remain on hold until August, with some saying home buyers could have respite until 2023. The Reserve Bank of Australia is tipped to start raising rates after August.Credit: Louie Douvis The RBA has kept the official cash rate at a record low 0.1 per cent since November 2020, adding to its quantitative easing program that has pumped more than $400 billion into the economy through the recession. The bank used its February meeting to end quantitative easing, and financial markets now expect it to lift the cash rate by more than a percentage point this year to deal with growing inflation pressures. The consu...