Tuesday 27 September 2022 06:17 AM OECD expects Reserve Bank of Australia to hike cash rate to 3.6 per cent trends now
The Paris-based OECD is expecting Australian interest rates in 2023 to hit an 11-year high of 3.6 per cent as inflation pressures worsen.
The international finance experts are even more worried about rising interest rates than three of Australia's Big Four banks.
Australian home borrowers have since May copped five consecutive monthly increases, taking the cash rate in September to a seven-year high of 2.35 per cent.
The end of the record-low 0.1 per cent cash rate has seen the Reserve Bank of Australia deploy the most severe monetary policy tightening since 1994.
But the OECD is predicting more pain and an 11-year high cash rate of 3.6 per cent in Australia next year.
'Further policy rate increases are needed in most major advanced economies to ensure that forward-looking measures of real interest rates become positive and inflation pressures are reduced durably,' it said.
'Policy interest rates are projected to rise to 4.5 to 4.75 per cent in the United States, 4.5 per cent in Canada, and 4.25 per cent in the United Kingdom in 2023, reflecting the visible labour market pressures in these countries, and 3.6 per cent in Australia.'
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The Paris-based OECD is expecting Australian interest rates in 2023 to hit an 11-year high of 3.6 per cent as inflation pressures worsen. The international finance experts are even more worried about rising interest rates than three of Australia's Big Four banks (pictured is a Melbourne auction)
Should the OECD's prediction for Australia come true, a borrower with an average $600,000 loan would be owing $1,116 more a month in repayments, compared with early May when the cash rate was still at a record low of 0.1 per cent.
Compared with now, this borrower would owe their bank an extra $456 a month in 2023, as their repayments climbed to $3,422 from $2,966.
As recently as May, this borrower would have owed $2,306 a
