The Reserve Bank of Australia lifted the cash rate to 0.35 per cent from a record low 0.1 per cent following Tuesday’s monthly board meeting.
It was a larger increase than expected by economists after last week’s spike in inflation to the highest level in some two decades.
CBA was the first of the big four banks to hike its variable home loan rates, saying it would pass on the full 0.25 percentage point increase.
ANZ and Westpac quickly followed suit.
RBA governor Philip Lowe has warned further interest rate rises should be expected in coming months, because without them inflation would grow substantially.
The Australian Bureau of Statistics will release retail trade figures for March on Wednesday.
Economists’ forecasts point to a more modest 0.5 per cent increase in the month after two solid months of growth.
However, predictions for March range quite widely, from a one per cent fall to rise of two per cent.
Retail spending has shown solid momentum since the turn of the year despite the outbreak of the COVID-19 Omicron variant and floods along the east coast of Australia.
However, there are concerns that the spike in petrol prices to above $2 a litre at one stage during March will have strained household budgets.
The ABS will also release home lending figures for March, which economists expect will show a further two per cent decline as the housing market loses steam.
– with AAP
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