There was no relief for borrowers in the grips of mortgage stress today, with the Reserve Bank opting to keep rates on hold for the seventh straight time. The governor conceded that she knows Australian households are hurting but says getting inflation under control means making tough decisions.
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00:00Hi everyone.
00:03Still smiling but remaining resolute.
00:06The RBA Governor faced off growing pressure to ease financial pain on Australian households.
00:11The board needs to be confident that inflation is moving sustainably towards the target before
00:16any decisions are made about a reduction in interest rates.
00:20With rates at a 12-year high at 4.35%, Michelle Bullock acknowledged people were hurting.
00:26We do recognise that there are people out there that are having to make some very, very
00:31difficult decisions.
00:33Higher interest rates have been hammering homeowners.
00:36Really tough and I'm just waiting for them to come back down.
00:39Single mum Tammy is budgeting every cent.
00:42She now spends nearly half of her pay on the mortgage alone.
00:45It's the thing I have the least control over.
00:47You can control the rest of it to a certain extent but not the mortgage.
00:51While she's still able to make ends meet, a growing number of Australians are falling
00:55behind on repayments.
00:57The latest data shows the share of bad loans has risen above pre-pandemic levels to over
01:031%.
01:04OK.
01:05The Treasurer is squinting at the faintest of silver linings, saying at least there wasn't
01:09a hike.
01:10The fact that interest rates haven't gone up for the best part of the year, I think,
01:14is an indication that we have been making welcome and encouraging progress in the fight
01:19against inflation.
01:20The Reserve Bank next meets in November but don't hold your breath for a rate cut then.
01:25The Commonwealth Bank is forecasting rate relief in December but that's ahead of most
01:29economists who are predicting we won't see a rate cut until next year.
01:34Because policy works with a lag, you actually have to start cutting before you're at target
01:39otherwise you've left it too late and I think February is about right.
01:43Our view is we won't get a rate cut until somewhere like April or May next year, the
01:46second quarter of next year.
01:48Thanks everyone.
01:49And any relief is still likely months away.