Interest rates rise to 12-year high

THE Reserve Bank has lifted official interest rates by 25 basis points, taking them to 7 per cent, the highest they have been in 12 years.

Interest rates rise to 12-year high

HOME owners struggling with mortgage repayments are set to face more hardship following the Reserve Bank of Australia’s (RBA) decision to raise interest rates a quarter of a percentage point to 7 per cent.

This is the highest interest rates have been in 12 years, adding about $50 a month to the average Australian mortage.

The 25-basis-point interest rate rise - the sixth in two years - was ordered after underlying inflation hit 3.6 per cent in the December quarter.

The RBA aims to keep underlying inflation between 2 and 3 per cent.

Some economists predicted the RBA would raise rates by 50 basis points – to 7.25 per cent - in a bid to get inflation under control.

Economists predict a further rise of 25 basis points in March.

With The Australian