Australia’s largest banks may be forced to impose “out of cycle” mortgage rate hikes as global interest rates push higher.
There is speculation they cannot afford the political fallout of raising interest rates while the banking royal commission is underway.
But JP Morgan’s chief economist Sally Auld disagrees with the argument that the political cost would be “too high” for the big four banks.
Why the RBA can’t move
Some economists see the Reserve Bank hiking interest rates before the end of the year. Ian Verrender reckons they’re dreaming.
“What that [view] ignores is the fact that they’re businesses with a clear commercial imperative, at the end of the day, they care about their margins and preserving it,” she said.