Save
RBA makes cash rate call - July 2018
The Reserve Bank of Australia has announced the official cash rate for July following its monthly board meeting.
RBA makes cash rate call - July 2018
The Reserve Bank of Australia has announced the official cash rate for July following its monthly board meeting.
The RBA board has once again decided to hold the cash rate at its current record low of 1.5 per cent, in a move predicted by most industry pundits.
None of the surveyed respondents on finder.com.au’s panel of industry experts predicted a rate change, while over 95 per cent of brokers surveyed by HashChing expect to see a hold, down from 98 per cent last month.
The decision to hold the cash rate at 1.5 per cent sees the cash rate being held for 21 meetings in a row, surpassing the previous record in 1995 to 1996, where it remained unchained for 17 meetings.
CoreLogic’s head of research Tim Lawless predicted a hold but changed his stance from last month, predicting a rate hike in November 2019 as opposed to October.
“Economic conditions remain reasonably stable, housing market growth continues to slow, household debt is at record highs, and inflation remains around the lower end of the RBA target range. With this scenario as a backdrop, the hold decision today from the RBA was widely anticipated,” Mr Lawless said.
By and large, finder.com.au’s panel overwhelmingly stated that the conditions are just not in place yet to see a rate change.
Nerida Conisbee from REA Group said that while businesses are confident in the current economy, consumers are not.
“Until this turns around, I think it is unlikely we will see an interest rate rise,” Ms Conisbee said.
Leanne Pilkington, managing director of Laing+Simmons, believed the decision to hold is still appropriate for the current economic climate.
“Global economic forces, the widening wage gap between older and younger working Australians, and outcomes of the banking royal commission might all impact the RBA’s outlook in the near term, but for now it’s important that interest rates remain steady,” Ms Pilkington said.
Like Ms Pilkington, Capital Economics’ Paul Dales claimed the RBA is more concerned about the results of the royal commission, as well as the conditions of the current global trade dispute.
“There are still very few signs that inflation is going to rise back to the middle of the RBA’s 2 [to] 3 per cent target,” Mr Dales said.
Despite a steady cash rate, John Kolenda, managing director at 1300HomeLoan, said mortgage holders are experiencing out of cycle rate increases from many lenders due to funding pressures and regulatory requirements, which means trying to borrow is going to become even harder.
“Borrowing capacity for consumers has dropped up to 30 per cent over the past quarter and the borrowing parameters vary by lender, making it very challenging for borrowers to understand how much they can borrow and from whom,” Mr Kolenda said.
“Cost of funding issues has forced some lenders to increase the rates of some home loan products by more than 30 basis points, while other lenders play a wait and see game under the spot light of the Hayne royal commission, but they have the same pressure to increase rates out of cycle.”
RELATED ARTICLES
Savings account
Protecting your savings from inflation in Australia
Inflation is an economic phenomenon that erodes the purchasing power of money over time, directly impacting the real value of your savings. In Australia, as in many parts of the world, periodic rises ...Read more
Savings account
Maximising your savings effortlessly: The power of automation in Australia
In the fast-paced world we live in, managing finances can often become an overlooked aspect of our daily routines. However, the advent of technology has introduced a seamless solution to this ...Read more
Savings account
Maximising your savings account: What you need to know
Saving money is a fundamental aspect of financial security and wellbeing. Read more
Savings account
Are ‘nudges’ the secret ingredient to financial wellness?
Are better financial habits a simple reminder away? Read more
Savings account
Afterpay launches Money app, bank accounts and retroactive BNPL
Afterpay is upgrading its app-based arsenal. Read more
Savings account
2020 saw the fastest increase in bank deposits since the GFC
Bank deposits of Australian households increased by more than 12 per cent last year. Read more
Savings account
Australians are putting savings goals ahead of holiday plans
While travel restrictions are soon set to ease, Australians are still putting their savings goals first. Read more
Savings account
More than half of Aussie Millennials don’t have a savings plan
Money is remaining a taboo subject for Millennials, which is leading to poor saving habits, a big four bank has revealed. Read more
Savings account
Protecting your savings from inflation in Australia
Inflation is an economic phenomenon that erodes the purchasing power of money over time, directly impacting the real value of your savings. In Australia, as in many parts of the world, periodic rises ...Read more
Savings account
Maximising your savings effortlessly: The power of automation in Australia
In the fast-paced world we live in, managing finances can often become an overlooked aspect of our daily routines. However, the advent of technology has introduced a seamless solution to this ...Read more
Savings account
Maximising your savings account: What you need to know
Saving money is a fundamental aspect of financial security and wellbeing. Read more
Savings account
Are ‘nudges’ the secret ingredient to financial wellness?
Are better financial habits a simple reminder away? Read more
Savings account
Afterpay launches Money app, bank accounts and retroactive BNPL
Afterpay is upgrading its app-based arsenal. Read more
Savings account
2020 saw the fastest increase in bank deposits since the GFC
Bank deposits of Australian households increased by more than 12 per cent last year. Read more
Savings account
Australians are putting savings goals ahead of holiday plans
While travel restrictions are soon set to ease, Australians are still putting their savings goals first. Read more
Savings account
More than half of Aussie Millennials don’t have a savings plan
Money is remaining a taboo subject for Millennials, which is leading to poor saving habits, a big four bank has revealed. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- Accountants Daily 30 Under 30 Awards
- ACE25
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian Aviation Awards
- Australian Broking Awards
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Space Awards
- Australian Space Summit
- Better Business Summit & Awards
- Broker Daily Business Awards
- Corporate Counsel Summit & Awards
- Cyber Security Summit & Awards
- Defence Connect Budget Lunch
- Defence Connect DSR Summit
- Fund Manager of the Year Awards
- ifa Excellence Awards
- ifa Future Forum
- Investor Daily ESG Summit
- Lawyers Weekly 30 Under 30 Awards
- Lawyers Weekly Women in Law Forum
- New Broker Academy
- Partner of the Year Awards
- REB Awards
- Reinnovate
- SME Broker Bootcamp
- SMSF Adviser Technical Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Law Awards
- Accountants Daily Podcast Network
- Australian Aviation Podcast Network
- Broker Daily Podcast Network
- Defence Connect Podcast Network
- HR Leader Podcast Network
- REB Podcast Network
- Relative Return
- Space Connect Podcast
- The Adviser Podcast Network
- The ifa Show
- The Lawyers Weekly Show
- The Smart Property Investment Show
PODCASTS
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.