One of Australia’s largest banks is predicting more doom and gloom for the economy saying standard variable home loan rates are set to rise into the double digits.

The ANZ believes the Reserve Bank will lift interest rates twice in the second half of this year to the highest levels in more than 10 years.

The bank’s predicting a rise of 25 basis points after the RBA’s August board meeting followed by another increase in November.

This would lift the official cash rate to 7.75 per cent by the end of 2008 the highest level since November 1991 from a current 7.25 per cent.

The commercial banks are expected to pass on the rises, which could push the average standard variable home loan rate of 9.50 per cent up to 10 per cent or more.

ANZ says the trigger for a rate increase in August would be a rise in second quarter inflation figures due to be reported in late July.

One of Australia’s largest banks is predicting even higher interest rates .. saying standard variable home loan rates are set to rise into the double digits.

The ANZ believes the Reserve Bank will lift interest rates twice in the second half of this year to the highest levels in more than 10 years.

The bank’s predicting a rise of 25 basis points after the RBA’s August board meeting followed by another increase in November.

This would lift the official cash rate to 7.75 per cent by the end of 2008 the highest level since November 1991 from a current 7.25 per cent.

The commercial banks are expected to pass on the rises, which could push the average standard variable home loan rate of 9.50 per cent up to 10 per cent or more.

One of our biggest banks is warning standard variable home loan rates could hit double digits by the end of year the highest levels in more than 10 years.

ANZ says if inflation continues to rise the central bank will likely lift official rates two more times in the next six months in August and November.

A hike of 25 basis points apiece would push the official cash rate to 7.75 per cent and the average standard variable home loan rate up to 10 per cent or more.

AAP