Prime Minister John Howard is playing down reports that banks may increase their rates, affecting all credit including mortgage interest rates, as senior Coalition figures continue to argue against an official interest rate rise next month.
The Reserve Bank board is widely tipped to increase the official interest rate when it meets on Melbourne Cup day.
"A large source of the funds that the banks are talking about, increasing the borrowing rates, come from their depositors," he said.
"Until there's significant increase in the price or the cost of those funds in the hands of the banks, given their profitable profit margins, there isn't a case for them increasing their rates."Source: ABC
