Australian Bond Exchange

ABE Weekly 20/01/23

ABE Weekly 20 January 23 PDF version


The Reserve Bank of Australia (RBA) set the cash rate at 3.10 per cent on 7 December 2022, an increase of 0.25 bps from the last change. The increase in interest rates could have an impact on first home buyers as their buying power will most likely decrease.  

Higher labour and material costs have increased housing prices, driving the increase in inflation. In fact, for November 2022 the inflation rate was 7.3 per cent.   

So, what is going on below the surface? Although households are under a lot of pressure due to higher mortgage repayment costs because of higher interest rates, consumers keep spending. In fact, household spending increased 11.4 per cent through the year November 2022.

United States

Fed Chair Jerome Powell has warned that the Fed still needs to control inflation which means that consumers should not be too optimistic about rates increases stopping just yet. In fact, although Inflation decreased to 6.5 per cent in December 2022, the Fed is likely to maintain high interest rates 


Interest rate stands at 2.50 per cent as of December 2022. Meanwhile, inflation in the eurozone decreased to 9.2 per cent in December 2021 from 10.1 per cent in November.  

Ursula von der Leyen, President of the European Commission stated that we are seeing rising inflation making the cost of living and conducting business more expensive.  We see energy being used as a weapon and threats of trade wars, the impacts being felt by families and businesses. 

United Kingdom

Andrew Bailey, Governor of the Bank of England, said that investors were still cautious about lending money to the UK Government, furthermore, he said that the Mini budget that included a series of tax cuts to stimulate economic growth was partially responsible for rises in mortgage rates and instability in the gilts market. 

Contact us if you have any questions or would like any assistance.

Disclaimer: The information and any advice provided in this ABE Weekly 20/01/23 newsletter has been prepared without considering your objectives, financial situation or needs.  Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things. You should obtain the relevant appropriate document for any product mentioned and consider its contents before making any decision. 

Copyright © 2022 Australian Bond Exchange Pty. Ltd. (“ABE”). (ABN 73 605 038 935, AFSL 484453)



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