news

RBA signals rate shift

By webmaster

How things can change in just one year! In November 2010, the Reserve Bank shocked the nation when it lifted the official cash rate on Melbourne Cup day.


Today, the Bank has got us wondering, but for a different reason.

At its October board meeting, the Bank signalled a slight shift in its rates approach, hinting it could cut the official cash rate before Christmas.

What’s behind this shift, you ask? According to the minutes of the October meeting, the Reserve Bank is prepared to do whatever it takes to support our economy, and while consumer confidence rebounded somewhat in September, it still remains incredibly weak.

The latest Westpac Melbourne Institute Index found consumer sentiment rose from 89.6 to 96.9 in September, but there is still a long way to go, according to Alan Shields, director of business research house RFi.

“Research conducted by RFi shows people are more concerned about the state of the domestic economy and the state of the global economy now than they were during the depths of the GFC,” Mr Shields says.

“A majority of Australians are choosing to save for no particular reason. They have no savings goal; they just want to save in a bid to help them feel more comfortable about the future.”

According to Mr Shields, the Reserve Bank’s decision to leave rates on hold for a prolonged period is actually not helping to improve the situation.

“We are at a place now where the RBA has not moved for the best part of a year and that makes people nervous – it creates uncertainty,” he says.

Perhaps the Bank understands this, which is why it is now hinting seriously at a rate cut. Whether it does in fact trim the cash rate from 4.75 per cent obviously remains to be seen.

RBA signals rate shift
SPI logo
Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%