Australia’s economy is set to grow slower than it ever has outside of recession. This is bad news for our standard of living

‘A 4.25% cash rate would in my view absolutely cause a recession. Could you imagine what home loan repayments rising 60% in one year would do to the economy?’ Photograph: Lisa Maree Williams/Getty Images

The Reserve Bank of Australia has slammed on the brakes harder than it has for 28 years, and now anticipates over the next two years the economy will grow slower than it ever has in a non-recessionary period. That is bad news for people’s standard of living.

Back in April the average home loan rate was 2.65%, the cash rate was at 0.1% and monthly repayments on a $500,000 home loan were $2,015.