Invest
Rate hike ‘unlikely’, but no place for complacency
Recent analysis of economic figures argues that the Reserve Bank of Australia has little choice but to hold the official cash rate at its current record low of 1.50 per cent.
Rate hike ‘unlikely’, but no place for complacency
Recent analysis of economic figures argues that the Reserve Bank of Australia has little choice but to hold the official cash rate at its current record low of 1.50 per cent.
Slow wage growth and sluggish inflation figures will influence the Reserve Bank of Australia’s (RBA) decision to hold the cash rate, according to RateCity’s Rate Forecaster.
The analysis revealed that 22 out of 23 economic indicators pointed to a cash rate hold.
RateCity money editor Sally Tindall believes that wage growth and inflation figures need to change before the RBA considers a rate hike.
“We know the direction for interest rates is up, but until inflation gets over the coveted 2 per cent mark, it’s unlikely the RBA will hike rates,” she said.
“Lack of wages growth is another culprit. Without substantive increases in pay, it’s unlikely the RBA will hike rates, particularly with household debt at a record high.”
Ms Tindall noted that a rate hold would be good news for borrowers, but she warned against complacency.
“The lack of movement in rates means debt-laden home owners continue to enjoy Australia’s longest run of record low interest rates, but that does not mean they should be complacent,” Ms Tindall said.
“For many people, now is an opportune time to refinance and get ahead on their mortgage repayments so they have a buffer for when interest rates eventually rise.”
The money editor also noted the low variable rates on offer for borrowers.
“There are currently dozens of lenders offering variable rates below 4 per cent, starting from 3.39 per cent,” Ms Tindall said.
The RBA will hold a board meeting on Tuesday, 6 February, to determine its cash rate decision.
Spending
How COVID stole Christmas
Australians are lowering their expectations for the upcoming festive season, with lower spending, socialising and travelling predicted, a research company has found. ...Read more
Spending
Why 4 in 10 households can’t afford essential items
Almost 40 per cent of tenants' households can’t afford essential items including bills, clothing, transport and food after they are paying rent due to falls in income caused by the COVID-19 pandemic...Read more
Spending
Gamblers double down on pandemic punt
Despite governments limiting access to venues, as well as sports around the world going into lockdown, Australians are gambling significantly more money, official figures show. ...Read more
Spending
How much should you pay to visit the GP?
Australians visiting their local GP are willing to pay more for a longer consultation time or a shorter waiting time, according to new research. ...Read more
Spending
Ticket provider pays $7m for misleading consumers
A leading ticket provider has been ordered to pay $7 million after making misleading or false claims about reselling tickets. ...Read more
Spending
The recession that stole Christmas
Australians are tipped to have a very different Christmas this year, with the COVID-19 economic downturn changing celebrations this holiday season. ...Read more
Spending
Australians more proactive about their financial future
Australians are using the COVID-19 period to become more proactive about their money, new research has revealed. ...Read more
Spending
Buy a pair, give a pair claim costs $3.5m
Eyewear retailer Oscar Wylee has been ordered by the Federal Court to pay $3.5 million in penalties for misleading or deceptive conduct and making or misleading representations about its charitable do...Read more
Spending
How COVID stole Christmas
Australians are lowering their expectations for the upcoming festive season, with lower spending, socialising and travelling predicted, a research company has found. ...Read more
Spending
Why 4 in 10 households can’t afford essential items
Almost 40 per cent of tenants' households can’t afford essential items including bills, clothing, transport and food after they are paying rent due to falls in income caused by the COVID-19 pandemic...Read more
Spending
Gamblers double down on pandemic punt
Despite governments limiting access to venues, as well as sports around the world going into lockdown, Australians are gambling significantly more money, official figures show. ...Read more
Spending
How much should you pay to visit the GP?
Australians visiting their local GP are willing to pay more for a longer consultation time or a shorter waiting time, according to new research. ...Read more
Spending
Ticket provider pays $7m for misleading consumers
A leading ticket provider has been ordered to pay $7 million after making misleading or false claims about reselling tickets. ...Read more
Spending
The recession that stole Christmas
Australians are tipped to have a very different Christmas this year, with the COVID-19 economic downturn changing celebrations this holiday season. ...Read more
Spending
Australians more proactive about their financial future
Australians are using the COVID-19 period to become more proactive about their money, new research has revealed. ...Read more
Spending
Buy a pair, give a pair claim costs $3.5m
Eyewear retailer Oscar Wylee has been ordered by the Federal Court to pay $3.5 million in penalties for misleading or deceptive conduct and making or misleading representations about its charitable do...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
