Australian home borrowers are likely to cop another interest rate hike by Christmas as uncertainty in the Middle East keeps inflation higher for longer, a leading university forecaster fears.<\/p>\n
With auction clearance rates remaining below 50 per cent for the third straight week, University of Melbourne associate professor Sam Tsiaplias is predicting more pain from the Reserve Bank of Australia by the end of this year.<\/p>\n
\u201cMost likely there will be another rate rise. I think it will happen in the next few months,\u201d he told The Nightly.<\/p>\n
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By continuing you agree to our Terms<\/a> and Privacy Policy<\/a>.<\/p>\n \u201cI suspect that will be the last one for the year.\u201d<\/p>\n Another Reserve Bank increase would take the cash rate to a 15-year high level of 4.6 per cent and add $122 to monthly repayments on an average, new mortgage of $735,000.<\/p>\n The RBA\u2019s three rate hikes so far this year are slowing the housing market with capital city auction clearances rates remaining below 50 per cent for the third straight week, preliminary Cotality data showed, with the overall level at 49.8 per cent for the week ending July 5.<\/p>\n Professor Tsiaplias, the principal research fellow with the university\u2019s Melbourne Institute of Applied Economic and Social Research, is predicting headline inflation will ease to 3.9 per cent in June, down from 4 per cent in May, based on their own basket of goods survey.<\/p>\n But he sees the consumer price index climbing again from July, closer to 4.5 per cent in coming months, as the Federal Government\u2019s fuel tax relief was halved to 16 cents a litre.<\/p>\n \u201cIt might stay high for a while, for several months, we just don\u2019t know what\u2019s going to happen with fuel prices,\u201d he said.<\/p>\n \u201cIf something happens to fuel prices and it jumps, that\u2019s going to cause a positive shift in headline inflation.\u201d<\/p>\n ANZ is expecting headline inflation will climb to 4.3 per cent by the end of this year, reaching levels last seen in 2023.<\/p>\n Underlying inflation without volatile price items was expected to peak at 3.7 per cent by the end of this month, which would mark the ninth consecutive month of the trimmed mean measure being above the Reserve Bank\u2019s 2-3 per cent target.<\/p>\n \u201cUnderlying inflation, I suspect, will remain elevated and above the RBA\u2019s target band through the course of this year but that doesn\u2019t automatically get you a rate hike,\u201d ANZ\u2019s head of Australian economics Adam Boyton told The Nightly.<\/p>\n Australia\u2019s unemployment rate is tipped to soar to levels last seen during the pandemic as inflation remains well above the Reserve Bank\u2019s target.<\/p>\n During June, the number of advertised positions fell by another 0.2 per cent, the latest ANZ Indeed job ads series showed.<\/p>\n While unemployment eased to 4.4 per cent in May, Mr Boyton is expecting the jobless rate to this year hit 4.7 per cent this year for the first time since late 2021 when Sydney and Melbourne were in COVID lockdowns.<\/p>\n \u201cBroadly, job ads have been trending slightly sideways for quite a while now,\u201d he said<\/p>\n \u201cI\u2019d expect the unemployment rate to drift higher but the keyword there is drift.<\/p>\n \u201cYou can get that drift higher in the unemployment rate, not by anybody that\u2019s currently employed necessarily losing their job, but the rate of new jobs growth just not being enough to cover those people entering the labour market.\u201d<\/p>\n A 4.7 per cent jobless rate would be higher than Reserve Bank expectations of a 4.3 per cent unemployment rate by December 2026, published in May.<\/p>\n Australia\u2019s inflation rate is among the highest in the G20, with the levels for May higher than 16 other member nations, a Trading Economics table showed.<\/p>\n","protected":false},"excerpt":{"rendered":"Australian home borrowers are likely to cop another interest rate hike by Christmas as uncertainty in the 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