Australia’s fourth largest bank NAB warned mortgage borrowers that they should be prepared for a hike in interest rates next month.
NAB says it now believes that the central bank will tighten interest rates by 25 basis points, lifting the official interest rate to 4.75 per cent when it meets on October 5th.
Not all analysts believe that rates will rise next month, but there is broad consensus that interest rates will be hiked before the end of the year. Alan Oster, chief economist from NAB said that the central bank’s tone in recent communication suggests that a rate hike is imminent.
“Until recently, RBA officials seemed to be signalling that interest rates were around average and growth was close to trend. There are now enough straws in the wind for us to believe that the tightening phase may well begin sooner, rather than later, and probably before the next inflation reading in later October.” Mr. Oster said.
Higher interest rates has prompted NAB to raise its forecast for the Australian dollar.
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