Commonwealth Bank reacts to RBA rise

The Commonwealth Bank has increased its interest rates after the government decided to up the cash rate.

The Commonwealth Bank reacted to the government's decision to increase the cash rate by upping interest rates across a number of products.

The bank – which offers a range of Commonwealth credit cards – increased the rate of its standard variable loans by 25 basis points to 6.86 per cent.

Further rises are expected on some of its bank accounts, which the firm said is "reflecting recent increases in market interest rates and wholesale funding costs".

Two savings accounts – the NetBank Saver and Business Online Saver – will both rise by 0.25 basis points on March 5th.

It was the first "big bank" to increase rates following the Reserve Bank of Australia's (RBA) 0.25 per cent cash rate hike to four per cent, according to the Australian Associated Press.

This news comes after Symon Brewis-Weston, executive general manager of local business banking at the Commonwealth Bank, said last month there was a "small lift" in consumer spending in January.

By Bret Clement