In a Westpac Economic Bulletin, senior economist Satish Ranchhod said the full impact of interest rate hikes is yet to be felt. "As a result, the average mortgage rate that households are paying is set to rise by a further 150 bps." That decline has mainly been due to the 17% fall in house prices since interest rates started rising in late 2021. "Those mounting financial pressures will see per capita household spending falling by around 2% over 2023 and 2024 combined. And with household spending accounting for around 60% of total economic activity, that will be a significant drag on economic growth."

Source: Stuff July 10, 2023 06:15 UTC