Cash-strapped mortgage holders could be bracing for higher interest rates, following the latest inflation figure released by the Australian Bureau of Statistics.
The headline quarterly inflation rate for the three months until December came in at 0.9 per cent, above with market expectations.
Economists had said if inflation rose by 0.8 per cent or less it would spare mortgage holders a rate hike in February.
Australia’s headline annual inflation rate came in at 3.8 per cent from 3.4 per cent in the 12 months until December.
Prior to Wednesday’s figures being released, Betashares chief economist David Bassanese said the quarterly inflation figure would either “make or break” the case for a rate hike next week.
“My base case remains that the quarterly gain in trimmed mean inflation will be 0.8 per cent, which should be enough to keep the RBA sidelined in February,” he said.
The Reserve Bank of Australia will be watching the data closely as it continues its battle to get Australia’s inflation rate between 2 and 3 per cent. In November, inflation was at 3.4 per cent.
The RBA meets next Monday and Tuesday, with governor Michele Bullock to announce its rates decision at 2.30pm on the Tuesday.
More to come
