Ensure you never miss an issue of the
real estate business bulletin
Economists divided over rates

Economists divided over rates

by Reporter 0 comments

Economists are divided as to whether or not the Reserve Bank will cut the official cash rate tomorrow.

Earlier this week, HSBC chief economist Paul Bloxham said he expected to see the Reserve Bank (RBA) leave the cash rate on hold, as new data showed the nation’s capital expenditure fell by less than expected.

“Mining investment is set to plateau as a share of the economy, not plummet, and non-mining investment is set to rise next year. So, we expect the RBA to be on hold next week,” he said.

But while Mr Bloxham expects rates to stay on hold, it seems not everyone is sure.

AMP’s chief economist Shane Oliver said he expects to see the cash rate drop to the historic low of 2.5 per cent at the June board meeting.

“I must say though, it’s another close call, as the RBA may decide that having cut in May and with the fall in the Australian dolla,r it will wait and assess for now,” he said.

“Against this though, the Australian dollar hasn't really fallen enough to provide a big stimulus to the economy. The latest business investment readings confirm that mining investment has peaked and that non-mining investment is likely to remain weak, readings for business and consumer confidence have been poor, forward looking jobs indicators are soft, and the toughish Budget and Ford's decision to quit manufacturing seem to have added to the sense of gloom surrounding the Australian economy.

“As a result, with low inflation providing plenty of scope to ease, the RBA should act again on its easing bias and on balance, we think that it will.”

Economists divided over rates
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?