Money & Investing – RBA Rate Rises: What Australians Should Expect

This week on Money and Investing, Mitch Olarenshaw and I discuss why the RBA could raise interest rates again and what this could mean for Australian households, businesses and investors.

1. Understand What Is Driving Inflation

Higher energy prices increase costs across transport, food and construction. We discuss how these pressures, alongside government spending and money supply growth, affect inflation and complicate the Reserve Bank of Australia’s response.

2. Recognise the Limits of Rate Rises

Higher interest rates aim to slow spending by making borrowing more expensive. However, they cannot directly lower global oil prices. We explain why households could face higher repayments while essential living costs remain under pressure.

3. Prepare for Higher Mortgage Repayments

Another RBA rate rise could place further strain on variable-rate mortgage holders. As repayments consume more household income, less money remains for other expenses. We discuss why borrowers need to prepare for further pressure on their budgets.

4. Assess the Impact on Businesses

When households cut spending, retailers, hospitality operators and other businesses can lose revenue while rent, wages and financing costs remain high. We look at how this pressure can affect employment, company earnings and banks through missed loan repayments.

5. Review Investment Opportunities Carefully

We discuss defensive sectors such as groceries, pharmaceuticals and utilities, where demand tends to hold up during weaker economic conditions. The focus is on business quality, earnings and valuation when assessing opportunities after share prices fall.

6. Consider Additional Income Sources

Building another income source can help households manage rising costs and reduce reliance on one wage. We discuss the role of a side hustle and why practical preparation matters when interest rates and living expenses remain uncertain.

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Disclaimer: Wealth Magnet Pty Ltd (ABN 52 618 868 830) trading as Australian Investment Education is a Corporate Authorised Representative (CAR no. 1255231) of Grange Financial Services Pty Ltd (AFSL No. 488609).

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.