Westpac’s chief executive Peter King has warned borrowers interest rates could stay higher for longer.
The Reserve Bank of Australia cash rate is already at a 12-year high of 4.35 per cent.
But new inflation data for the March quarter has made economists rethink the prospect of rate cuts in late 2024.
‘While inflation has fallen, getting it down to target range is proving difficult globally and here in Australia,’ he said on Monday.
‘It is likely interest rates will stay higher for longer.’
Westpac’s chief executive Peter King has warned borrowers interest rates could stay higher for longer
Mr King made the prediction as Westpac revealed its half-year net profit of $3.342billion, for the first half of 2023-24, was 16 per cent weaker than the corresponding six-month period in 2023-23 – covering July to December.
Westpac is officially predicting a November rate cut, instead of a September easing.
Chief economist Luci Ellis, a former Reserve Bank assistant governor, changed Westpac’s prediction after new Australian Bureau of Statistics data, released on April 24, showed underlying measures of inflation in the year to March were still above 4 per cent – or at levels well above the RBA’s 2 to 3 per cent target.
Headline inflation eased to 3.6 per cent from 4.1 per cent but this figure included volatile price items, including fruit and vegetables which were 0.2 per cent cheaper over the year.
