how much further scheduled mortgage payments will rise as fixed - rate borrowers roll off their loans this year are provided in graph 4. scheduled mortgage payments – interest plus scheduled principal repayments – are shown in the blue bars. these rose by about 1. 1 percentage points of household disposable income over 2022. the blue dashed line provides an estimate of how much further scheduled mortgage payments will rise based on the current cash rate : around 1. 5 percentage points further by the end of 2024, with the bulk of that flowing through by the end of this year. hence, only about 45 per cent of the rise in the cash rate to date had passed through to total scheduled mortgage payments at the end of 2022, though slightly more will have passed through in the early months of this year. graph 4 housing mortgage payments quarterly ; share of household disposable income % scheduled payments projections * * historical estimate * % interest and scheduled principal * * * extra payments estimated scheduled payments using credit foncier model. based on cash rate increases to date. projections incorporate the observed gap between cash rate increases and increases to variable loan rates. sources : abs ; apra ; rba savings buffers there ’ s a second important factor that is likely to be adding to the lag in the transmission of monetary policy to household spending – the large run up in the stock of household savings during the pandemic, with some of that undertaken by borrowers. we can see that in the sharp rise in extra mortgage payments during the pandemic shown as the violet portion of the bars in graph 4. these are payments into offset and redraw accounts. balances in these accounts are a source of savings that mortgage holders can draw upon, if they choose, to help sustain their spending in the face of rising interest rates and other cost - of - living pressures. even though these extra mortgage payments declined a little through 2022 as scheduled mortgage payments rose, borrowers in aggregate were still adding to this stock of savings. [ 9 ] the stock of these extra payments is high ( relative to incomes ) compared with historical experience. graph 5 shows the quarterly flows into offset and redraw accounts. over the decade or so prior to the pandemic, these payments averaged about 2 per cent of households ’ disposable income. this reflects the fact that borrowers in australia tend to pay down their mortgages well before the typical contracted term of 25 years. [ 10 ] from 2012

? according to our latest forecasts, we are expecting the strong inflation to return to normal in the medium term. uncertainty, however, is exceedingly high. many already see us facing a repeat of the stagflation of the 1970s. the word stagflation is a portmanteau of stagnation and inflation, coined to reflect a contemporary combination of high inflation rates and stagnating economic output. are we once again facing years of high inflation and weak growth? there are indeed some parallels between stagflation at that time and the situation today. during the 1970s, the two oil crises in 1973 and 1979 - 80 sent inflation soaring. in the present day, the pandemic - related supply constraints and the russian attack on ukraine are having a similar impact on prices. current oil price increases are significantly lower than they were back then. this time around, though, oil is not the only factor, as gas in particular is playing a critical role as well. the price of gas in the german market was almost five times as high in july as it was a year ago. by comparison, brent crude oil was “ only ” 70 % more expensive in euro. and the worst may be yet to come. a persistent limitation in gas supplies would, amongst other things, prolong the period of high inflation rates and increase the risk of second - round price increases becoming entrenched. the stagflation of the 1970s and developments today also share similarities in the expansionary orientation of fiscal policy. to wit, many countries have cushioned the pandemic - related economic slump by rolling out large - scale fiscal support measures. in the 1970s, the fiscal policy response in industrial countries to the first oil crisis was also accommodative, with the aim of shoring up purchasing power. [ 2 ] germany saw strong wage growth, especially in the public sector. in addition, the fiscal situation in the united states was already strained in the run - up to the oil crisis owing to the high level of spending on the vietnam war. that said, there is some evidence that today ’ s crises will have a different impact on economic activity, perhaps even a lesser one. thus, the degree of fiscal policy accommodation is still high, but it is declining overall. this is because the pandemic has largely been overcome and coronavirus response measures are being phased out. moreover, there are structural differences between the labour markets in the 1970s and today. the index