PHOTO: CAMERON BURNELL/STUFF – Acting Reserve Bank governor Grant Spencer has spent most of the past 40 years working at the Reserve Bank, as well as stints at the International Monetary Fund and ANZ. He retires next month.

Borrowers should brace for the risk of a sharp rise in interest rates, with recent sharemarket turmoil a “warning sign” of volatility to come.

While the Reserve Bank has again signalled that it expects the official cash rate (OCR) to stay at the current record low of 1.75 per cent for more than another year as inflation stays low, acting governor Grant Spencer said the financial system was easily spooked by unexpected news.


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