Timothy Sumer

Around one million households will have to drastically cut back their spending due higher interest rates and soaring inflation. Subscribe: Read more here: That's the warning from a prominent economist, who says Australia is just as likely to fall into a recession as avoid one. ABC News provides around the clock coverage of news events as they break in Australia and abroad, including the latest coronavirus pandemic updates. It's news when you want it, from Australia's most trusted news organisation. For more from ABC News, click here: Watch more ABC News content ad-free on ABC iview: Go deeper on our ABC News In-depth channel: Like ABC News on Facebook: Follow ABC News on Instagram: Follow ABC News on Twitter: Note: In most cases, our captions are auto-generated. #ABCNews #ABCNewsAustralia #AusBiz... ( read more ) BREAKING: Recession News LEARN MORE ABOUT: Bank Failures REVEALED: Best Investment During Inflation HOW TO INVEST IN GO

Some economists are warning we're heading for an unnecessary recession. Economists at the consultancy firm Deloitte are warning of a potential recession should the Reserve Bank keep hiking interest rates. Australian consumers surprised everyone with their continued appetite to spend all through last year despite the official cash rate jumping from 0.1 percent to 3.1 percent and inflation rocketing to its highest level since the early 1990s. Retail spending held up remarkably well. But the economists at Deloitte believe consumers are about to run out of steam, saying there are already signs that households are feeling the pinch from falling house prices, higher mortgage repayments and expenses like rent, petrol and groceries getting ever more expensive. Something which economists are watching closely is how well households cope with fixed rate mortgages expiring this year. Several hundred thousand fixed rate mortgages will roll off - meaning borrowers will need to t