He said many people had not prepared for the string of interest rate rises, with the Reserve Bank of Australia predicting in 2021 there wouldn't be any until 2024.

The nation's official cash rose by 25 basis points to 3.10 per cent on Wednesday in what was the eighth rise since May. "It's going to be really hard on people," Mr Kelly said. "We're now seeing the highest interest rates we've had in 10 years."

Mr Kelly said that number of rate rises was very difficult to budget for.

He said he believed there were more rate rises to come.

"It depends what happens with inflation but I think there are more rises to come," he said.

Mr Kelly said he believed interest rates would peak in mid 2023. However, the increases are not bad news for everyone.

Mr Kelly said term deposits were once again proving to be a good investment choice.

"Term deposits have been of no value to some people because they were so low but finally the tide is turning," he said.

Mr Kelly said the latest rise came at a difficult time for people struggling to keep up with the rising cost of living.

"It might mean a tough Christmas for some people," he said.

Brian O'Halloran and Co agent Brian Hancock said he had seen the writing on the wall. "Four or five months ago I said everyone should hold onto their seats because it was going to be a tough ride," he said.

Mr Hancock said he was concerned some people may be forced to sell their homes because of their increased mortgage costs.

He said the latest rise may also increase the cost of rentals, which were in short supply in the south-west.

"It's going to put a lot of hardship on a lot of people who are just not prepared for it," Mr Hancock said.

Warrnambool Association of Independent Retirees' spokesman Rod Carter said the rise was good news for people with investment portfolios.

However, he said it was frustrating the banks often took their time to increase the interest rates on term deposits.

"I dare say all home loans are going up today or tomorrow but I'd be surprised if the term deposit rates go up before Christmas," Mr Carter said. He said it was hoped the rise would have a positive impact on the superannuation accounts of retirees.

"Hopefully super funds might be higher at the end of the year than they were at the start of the year," Mr Carter said.

Treasurer Jim Chalmers delivered the sobering pre-Christmas news after the Reserve Bank raised the official cash rate to 3.10 per cent on Wednesday- the highest level since 2012.

Reserve Bank governor Philip Lowe said the board expected to keep lifting interest rates as it tries to put the brakes on inflation, which is set to peak at 8 per cent this year.

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