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Banking giant ANZ now expects borrowers to tackle four 50 basis point rate hikes in November – with the country’s major banks expecting cash rates to settle in 2023 once inflation is under control. The Big Four on Tuesday forecast the Reserve Bank of Australia’s cash rate would more than double from an existing three-year high of 1.35 percent to a 10-year high of 3.35 percent on Melbourne Cup Day. ANZ chief economist David Plank expects the RBA to raise interest rates by 0.5 percentage points in a row in August, September, October and November – and keep rates at that level throughout 2023 and 2024. “We think the RBA will take its cash rate target to a tight setting above three percent by the end of 2022, more than 12 months earlier than our previous estimate,” he said. A two percentage point increase in mortgage rates in November would leave borrowers with an average $600,000 mortgage owed $708 more a month in payments as the RBA cash rate hit its highest level since October 2012. But

Now the bank faces what is shaping up to be the biggest overhaul of the country’s economic policy in decades, with the RBA’s formal review. The release of the terms of reference for the review by Treasurer Jim Chalmers is imminent. This will mark the bank’s first review since the 1981 Campbell report – when Australians used Bank Cards, people kept $1 and $2 notes in their wallets and mortgage interest rates were capped by the government at the time. Reserve Bank Governor Philip Lowe has maintained an upbeat economic assessment throughout his tenure. The review was prompted by concerns about the bank’s handling of monetary policy prior to the COVID-19 pandemic. A series of articles in this masthead in April last year, outlining criticism among the bank’s economics, handling of its policies and governance structure, provided a staging ground for the demand for review. Both political parties went to the election promising a review. Chalmers describes his review of “RBA goals and objectiv