Interest rates have risen for the eight month in a row to their highest level in a decade.

RBA governor Philip Lowe said the bank’s board decided to raise interest rates by a quarter of a percentage point to 3.1 per cent as it works to bring inflation under control.

Tim Reardon, Chief economist at Housing Industry Association told Oliver Peterson on Perth Live that the RBA should have paused to observe the impact of the fastest increase in a generation and not continued to raise rates.

“Because of the volume of building work we had under way in the middle of this year and the employment that creates, we won’t see the adverse impact of this rise in cash rates until late 2023, early 2024,” he told Oly.

“And it’s that long lag that raises the risk that the reserve bank has gone too far, too soon and they won’t know that until they see the impact on employment, which is probably 18 months away.”

Press PLAY to hear the full discussion