NAB CEO Ross McEwan says interest rates must return to more normal levels, but it needs to happen slowly to avoid a shock to consumers.
McEwan expects the Reserve Bank of Australia to lift rates in the second half of this year.
“It’s been, now, 11 years of interest rate reductions. And we need to get back to something that’s much more normal than it is today,” he tells the ABC’s RN Breakfast.
“Very cheap money has created house price inflation that is also hurting.”
McEwan says it’s a fine balance between lifting employment and wages while holding prices down.
“They’re (the RBA are) quite right to be quite cautious about it. But I think we are getting to a point now, with inflation starting to bite, that interest rates will have to go up this year.”
Meanwhile, NAB research has shown one in five people quit their job within the last year. But McEwan doesn’t necessarily think it amounts to what’s been dubbed the “great resignation”.
“We’ve seen two years of people being quite conservative because they’ve been pretty much locked at home, particularly if you’re in Victoria,” he says.
“Now they’re out there realising that there are jobs out there, and they’re having a quiet look around and quite a few are taking the opportunity of changing their job.”