Symond calls on RBA to pause rates

Symond calls on RBA to pause rates

21 April 2010 by Staff Reporter 0 comments

Aussie Home Loans chief executive John Symond has warned the RBA not to raise rates again in May, stating that another increase would be a "mistake".

Speaking at a conference in Adelaide, Mr Symond said a decision by the RBA to lift the official cash rate for the sixth time in seven meetings would hurt consumers.

"Six out of seven isn't the definition of gradual (increases), so I would urge the RBA to be very cautious," he said.

"People are pulling their horns in as far as spending, retail is not going gangbusters, the amount of housing loans are dropping," he said.

"There are a lot of signals suggesting that this economy will slow down and the RBA has to be very careful."

According to Mr Symond, the RBA needs to take into account the state of the global economy when the board meets next month.

“Outside of Asia, it's still a basket case," he said, adding that the RBA has “a lot of reason to show caution at the moment”.

But NAB chief economist Alan Oster is predicting the cash rate to increase again in May, taking the official interest rate to 4.5 per cent.

Aussie Home Loans chief executive John Symond has warned the RBA not to raise rates again in May, stating that another increase would be a "mistake".

Speaking at a conference in Adelaide, Mr Symond said a decision by the RBA to lift the official cash rate for the sixth time in seven meetings would hurt consumers.

"Six out of seven isn't the definition of gradual (increases), so I would urge the RBA to be very cautious," he said.

"People are pulling their horns in as far as spending, retail is not going gangbusters, the amount of housing loans are dropping," he said.

"There are a lot of signals suggesting that this economy will slow down and the RBA has to be very careful."

According to Mr Symond, the RBA needs to take into account the state of the global economy when the board meets next month.

“Outside of Asia, it's still a basket case," he said, adding that the RBA has “a lot of reason to show caution at the moment”.

But NAB chief economist Alan Oster is predicting the cash rate to increase again in May, taking the official interest rate to 4.5 per cent.

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