THE RBA got it wrong. Instead of continuing low interest rates as optimistically predicted by RBA governor Philip Lowe, we now have much higher rates and average mortgages struggling to find an extra $200 per month. In response to increased repayments to banks, landlords are increasing rents to their tenants. The RBA governor, through his erroneous advice, has added to hardship, as home buyers continued to borrow, in the expectation that interest rates wouldn't rise much, if at all. ('We've had our Phil', Newcastle Herald, 7/7).
There are certainly more interest rate rises to come before inflation falls back to the RBA's preferred rate. If the RBA gets it wrong again, we could end up with a 'hard landing' recession and the misery that this entails.
