Mortgage holders should brace for short-term pain as RBA signals steady interest rate rises to tackle inflation

The Reserve Bank of Australia governor, Philip Lowe, said a steady increase in interest rates was preferable to stave off rising inflation. Photograph: Diego Fedele/AAP

Mortgage holders should brace themselves for interest rate rises of at least another 1.15 percentage points before the end of the year as the Reserve Bank of Australia attempts to hose down inflation before it takes hold of the economy.

The RBA governor, Philip Lowe, said he believed inflation was on track to hit 7% by the end of 2022, with an unemployment rate of 3.5% but said the bank was confident inflation would return to the “target range” of between 2% and 3% in a “short while”.