Interest rate rises brake loan funding

Interest rate hikes have put a brake on lending, with firms and home buyers borrowing less, new figures show. Total commercial finance commitments slumped by 10.4 per cent in February, to $45.723 billion, the Australian Bureau of Statistics (ABS) said on Tuesday. Lease finance dropped 4.4 per cent, to $596 million while housing finance for owner occupiers fell 6.0 per cent, to $14.947 billion. Personal finance commitments went against the down trend, rising by an adjusted 0.9 per cent in the month, to $7.451 billion. CommSec equities economist Savanth Sebastian said the latest lending figures were further indicators the recent interest rate rises have impacted on the Australian economy. "For the Reserve Bank the rate hikes have worked and the emerging slowdown would fit right in with its long term plans of a soft landing while keeping inflation under check," he said.


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