Revealed: RBA considers 0.50% rate rise

Minutes from the last meeting of the Reserve Bank reveal that it considered increasing interest rates by half a percentage point. The pros and cons of a larger than usual move were debated at length by the board as it wanted to send a strong signal of its determination to cut inflation. In the end however, it was swayed by concerns about how hard such a move would hit home owners who would have to pay more than $100 extra per month to service a mortgage of $300,000. Markets are now expecting two further rate rises over the next few months while some economists believe there is the possibility that the RBA will go for the 50 basis point rise at its March meeting.

Source: Sydney Morning Herald