- Banks want to lift mortgage rates higher
- RBA rejects claim of margins being eroded
- Expected rate rise could be delayed by month
THE big banks are preparing to defy Reserve Bank of Australia and government warnings that they have no justification for lifting their mortgage rates by more than the official cash rate.
The RBA yesterday dismissed complaints by banks that their margins were being eroded by the increasing cost of raising funds on world markets. And Wayne Swan launched a ferocious attack on the integrity of the banks.
But analysts believe the banks are preparing to add a further 0.15 percentage points to their mortgage rates.
"We expect the Reserve Bank to raise rates by 25 basis points next Tuesday, with the banks likely to piggyback by adding 15 basis points of additional rises," UBS analyst Chris Williams said.
The expected clash with the banks comes as The Daily Telegraph reported that weaker than expected building approvals figures could result in the Reserve Bank postponing a rise in official interest rates until November.
Read more: http://www.news.com.au/money/interest-rates/bank-to-compound-rates-pain/story-e6frfmn0-1225932596415?area=money#ixzz119Vao51b
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