Reserve Bank governor Michele Bullock says she does understand that for mortgage holders, today’s interest rate rise is not a great outcome.
“What’s also not great for them, or for anyone else, is if inflation remains elevated because every time they go to the shop, every time they go to buy their groceries, every time they go to get personal services, medical [treatment], if inflation is high, that’s going to keep going up,” Bullock said.
“Ultimately, it is best if we get inflation under control, and our instrument is the interest rate, and I understand that people with mortgages find that hard. But the alternative is potentially even harder, so I empathise with them.”
Reserve Bank governor Michele Bullock speaks about today’s interest rate rise.Oscar Colman
Asked if the board considered a rise of 0.5 per rate, she said no.
But Bullock was a little exasperated when repeatedly asked if mortgagees could expect further rate rises this year.
“More versions on the same question? I’m not sure what I can add, other than say that the board has taken a cautious approach, they’ve made one rate rise this time. And we’ll observe now what happens to financial conditions,” she said.
She went on to say: “I’m not predicting there will be more rate rises, but I’m also not saying that if inflation does remain too high, that there might [not] be, so I’m going back to that never ruling anything in or out phrase, I suppose. But at this stage, just one.”