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Date Published : Tuesday, March 11, 2008
The Reserve Bank of Australia (RBA) may be ready to halt the rise in interest rates as homeowners across the country are struggling to cope with the hikes.
Last week, the RBA increased interest rates for the second successive month - and the fourth month out of six - by 0.25 per cent to 7.25 per cent, a 12-year high.
A number of Australia's largest banks - including the Commonwealth Bank, ANZ and National Australia Bank - have followed suit, increasing the interest charged on variable rate home loan products. As yet, no major bank has passed on the latest rate increase to savings accounts.
However, the Australian reports that the RBA may halt its current train of thought after suggestions that the 16-year-long growth in the Australian economy could be starting to slowdown - following a similar pattern to economies throughout the world.
RBA governor Glenn Stevens told the publication: "There is tentative evidence that some moderation in household demand is beginning to occur, with business and consumer sentiment softer recently and household credit demand slowing somewhat."
Further evidence of a slowdown was revealed earlier this week, when figures from JP Morgan showed that the usual January sales shopping peak was actually flat this year, with sales much worse than the forecasts predicted.
The research suggested a gloomy outlook, with rising petrol prices, the RBA's decisions and increasing inflation all likely to stunt sales growth.
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