Homeowners bracing for new interest rates rise as cost of living crisis bites

The Reserve Bank is expected to raise interest rates to the highest level in seven years when it meets today.

The predicted half-percent rise to 2.35 per cent would mean interest rates would be at their highest level since December 2014 as the central bank bids to combat soaring levels of inflation.

A new official cash rate of 2.35 per cent would see the average homeowner paying about $1000 extra a month since rates began rising in May.

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The Reserve Bank lifted the official cash rate from its historic low of 0.1 per cent in May, followed by increases in June, July and August.

The impact of rising inflation is spelled out in a new report today by the the Australian Bureau of Agricultural and Resource Economics (ABARES).

It found the price of vegetables will rise further in the coming year

Drivers are also bracing for pain at the supermarket checkout to soon be mirrored at service station bowsers.

The former Morrison government cut the fuel tax levy in half in May, slicing 22¢ off the cost of a litre of petrol.

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Treasurer Jim Chalmers has ruled out extending the fuel discounts.

And when the tax holiday ends on September 28, it will trigger a jump of 25¢ once GST is included.

Later this week, RBA governor Philip Lowe is expected to outline the prospects of further interest rates in a speech on Thursday.

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