The Commonwealth, NAB and ANZ all lifted rates by the full 50 basis points (0.5 per cent). Macquarie also raised its rates in line with the Reserve Bank lifting the benchmark cash rate to 1.35 per cent.

The NAB also increased rates for its savings accounts.  Its Reward Saver account would increase by 0.50 per cent, effective from July 15, while its12-month Term Deposit account would increase to 2.50 per cent.

The Commonwealth and ANZ made similar changes.

Meanwhile, the oil price fell below $US100 a barrel overnight, the lowest it has been for four months, but there is some speculation it may bounce back because of tight supply.

Lower petrol prices generally follow on from a drop in crude prices but this time there are conflicting factors including skyrocketing gas prices.

But the collapse in its value has been brought about by fears of a global recession which would drive down the demand for oil. Those same fears caused the US Dow Jones to shed 560 points overnight.

The ASX opened stronger this morning but the Australian dollar was at US68 cents.

Citgiroup believes the oil price would fall to about $US65 a barrel if the US heads into a recession.

Petrol prices in Brisbane were around $2.08 this morning although there were cheaper prices going at some places. Prices have been above $2.20 recently.

While there could be a short-term reprieve for Australian motorists, petrol prices will definitely climb high later this year when the 22 cents a litre cut to fuel excise ends. The cut was brought in by the former government as a six-month cost-of-living benefit.

The global economy was also being impacted by China’s continuing battle to contain Covid. Mass testing was continuing in Shanghai and there were fears of more lockdowns.

The Bank of England has also warned overnight that the UK economic outlook was “very uncertain” and the US bond inverted so that short term rates exceeded the long term which generally precedes a recession.

While the major economies were in trouble and heading towards recession, there were no such fears for Australia, as yet.

The CBA’s economists expect the Australian economy to keep growing but at a slower pace. In calendar 2022 the economy is tipped to grow by 3.5 per cent and then grow a
further 2.1 per cent in calendar 2023

Morgan’s economist Michael Knox said Australia’s strong terms of trade was creating enormous wealth. Unemployment also remains low in Australia and households were continuing to spend.

QIC senior economist Matthew Peter said homeowners were on average 21 months ahead of the mortgage payments. However, he has been critical of the RBA for acting too slowly on rates.

CBA economist Gareth Aird said the interest rate hike by the Reserve Bank meant that if it followed with another similar hike in August it would become the one of the most aggressive central banks in the world.

The CBA also announced it would pass on the full interest rate increase of 0.5 per cent, the first of the majors to do so.