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Mia De Rauch is no stranger to hard work, however she is among the first to admit that life is getting more expensive by the day.
Key points:
- The Reserve Bank has raised the cash rate to 4.1%, a level not seen since early 2012
- A Torquay business owner says she is working two jobs to keep up
- It is the second month in a row the cash rate has risen by 0.25 of a percentage point
The 37-year-old purchased a home in Torquay with her partner a year-and-a-half ago.
They were among the tranche of Australians to hang their hats on the the Reserve Bank of Australia's now infamous indication that interest rates would not likely rise until 2024.
Her mortgage repayments have risen by $20,000 in the past year, while utility bills have risen about $400.
She said she had been forced to take on a second job in addition to her work as a full-time videographer just to make ends meet.
"I'm now sitting here, stressed, thinking I have no more time to give," she said.
On Tuesday the Reserve Bank of Australia increased the cash rate to 4.1 per cent, a level not seen since early 2012.
The bank's board decided to lift the cash rate target by 0.25 of a percentage point for the second month in a row, amid concerns inflation was taking too long to come down.
The successive rate rises have proven a tough pill to swallow for Ms De Rauch.
"We've had ongoing mortgage increases," she said.
She said utility bills, petrol and grocery bills had significantly risen as well.
"I've cut back on non-essentials, like streaming accounts and brunch," she said.
"I've held back on personal spending as well."
Ms De Rauch said she had picked up hospitality shifts in addition to running her Torquay business.
She said she had been working an extra 10-15 hours a week to stay on top of bills.
"I feel tired, I feel like there's a lot going on," she said.
"I'm not getting to spend much time with my family."
She said she hoped her busy work schedule was temporary but worried she would struggle to keep up with rising living costs if inflation didn't come down.
No relief in sight, says Anglicare
Anglicare Victoria regional director Michael Oerlemanns said his organisation was seeing new cohorts of people seeking support.
"It’s people with incomes, with families. Everyone’s struggling with the cost of living, everyone’s hurting," he said.
While the waitlist for Anglicare Victoria's support services were full, he said the number of people seeking support had increased by 20 per cent over the past year.
He was concerned that would increase after Tuesday's interest rate rise.
"The pain people are experiencing isn't new, but the number of people experiencing it is increasing and there doesn't appear to be any sign of relief in sight," he said.
Setback for households
Bendigo Bank chief economist David Robertson said he thought the reserve bank would hold off on a rate rise and wait until quarterly data came out in July.
He said the decision was swayed by the inflation increase in monthly data, increasing house prices and an increase to the minimum wage.
"Arguably the RBA is at risk of abandoning a soft landing aspiration and instead seeking a faster return to its inflation target, at the expense of jobs and with a greater risk of a hard landing… a recession."
The rate rise means repayments increase by an an extra $15,000 a year for an average home loan of $500,000.
"It's another setback for household budgets," Mr Robertson said.
He said further rate rises couldn't be ruled out.
"It will come with consequences," he said.
"The job market will be weakening, we've already seen the unemployment rise up to 3.7 per cent over the past few months.
"Economic growth will slow."
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