Interest rates decision welcome news but rate rises on the way

Today’s decision by the Reserve Bank of Australia (RBA) to leave interest rates on hold is a welcome relief for homeowners, but Labor’s wasteful spending continues to put pressure on inflation and rates could rise soon, said Senator Marise Payne, Shadow Minister for Housing.

“We welcome the RBA’s decision to leave rates on hold for October, but warn homeowners that interest rates are almost certain to rise in coming months,” Senator Payne said.

“Australian homeowners are already paying record amounts of their disposable incomes on servicing mortgages and future rate rises will mean more hip-pocket pain, in addition to electricity prices having gone up 35 per cent since the end of 2007, gas prices by 24 per cent, water prices by 29 per cent and rents by 15 per cent.

“Mortgage repayments could be even higher again if the banks lift their rates above and beyond the RBA’s cash-rate increases.

“The Rudd-Gillard Government has continued its wasteful spending even after the worst of the global financial crisis is behind us and this is feeding into inflation.

“Labor has shown it has no intention to take its foot off the accelerator even though the Reserve Bank is about to hit the brakes.”