RBA governor Philip Lowe apologises for past rate guidance

The governor of Australia’s central bank, Philip Lowe apologized on Monday to those who regretted taking out mortgages last year based on his guidance that interest rates would not rise until 2024.

Reserve Bank of Australia’s (RBA) Governor Philip Lowe said before lawmakers the guidance on rates staying at a historic low of 0.1% had been conditional on the economy developing as predicted and inflation staying subdued.

Instead, the economy recovered much faster than expected from pandemic lockdowns, and this, combined with global events, drove inflation to 32-year highs.

The RBA began raising interest rates in May and has since increased them to a nine-year high of 2.85%, drawing widespread public criticism in the process.

Lowe stated that the public “didn’t get the caveats” in his guidance and that the bank would no longer use such wording in the future.