Business

Reserve Bank interest rate hike prospect has mortgage holders and small businesses worried

Every time interest rates rise, the impact reverberates directly through Barbara Aldridge’s second-hand bookshop.

“Everyone goes ‘huh’, clutches their money and I’m one of the last places they spend money, so everyone sort of takes a breath,” Ms Aldridge said.

As a keen observer of people’s spending habits over 27 years behind the counter of her business in the Perth suburb of Guilford, she has noticed people are most likely to keep money in their pocket when there are interest rates rises, elections and wars.

She expects it to be no different if the Reserve Bank of Australia lifts rates again, as widely expected, when it meets on Tuesday.

Concern for young mortgage holders

While she can mostly absorb the impact of rate increases on her business loan, she is worried about younger people with large home loans.

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