The fourth hike of the year
The RBA has lifted the official cash rate to 4.60%, its highest since November 2011 and the fourth increase this year. Australian Broker canvassed economists and lenders for the reaction, and the through-line for business is a familiar one: higher cost of capital, lower borrowing capacity.
The household numbers are easy to picture. Mortgage Choice's Anthony Waldron put this hike at roughly $90 a month on a $600,000 variable loan. Compare the Market's David Koch pointed to about $5,568 more a year on an average $731,000 mortgage. For businesses the mechanics are the same, just without the tidy single figure: anything on a variable facility reprices, and headroom on new lending contracts.
The double squeeze
Xero economist Louise Southall described the position bluntly: consumer spending power falls while debt repayments rise, and small businesses "lack the pricing power to pass on higher costs." CPA Australia's Gavan Ord listed the directions the pressure comes from at once: higher interest repayments, persistent inflation, volatile fuel prices, rising operating costs and softer demand. Some firms will pass costs on; others will rethink expansion or hiring.
Experian's data adds texture on where strain is landing. Personal loan hardship rose to 2.14% in June, up 14 basis points year-on-year, while mortgage hardship eased to 0.92%. Repayment stress, in other words, is building unevenly.
What it changes for borrowers
Serviceability calculations tighten with every move up. A facility that cleared the buffer at the start of the year may not now, and the gap between what a business wants to borrow and what a lender will extend widens. Several voices in the piece expect at least one more rise, with VanEck flagging December as possible. That's commentary, not a forecast we're endorsing.
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