Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Reserve Bank makes cash rate announcement

By Staff Reporter
02 September 2014 | 1 minute read

The Reserve Bank of Australia has announced the outcome of its monthly board meeting.

The Reserve Bank backed up the prediction of most economists by leaving the official cash rate at a record-low 2.5 per cent for the 13th consecutive month.

All 25 economists surveyed by comparison website finder.com.au had forecast rates would remain on hold.

Advertisement
Advertisement

AMP Capital chief economist Shane Oliver told finder.com.au there was no need to change the cash rate because the economic outlook had remained steady since the August meeting.

ANZ chief economist Warren Hogan said the economy had been playing out as expected, with housing doing well and the gradual transition to a non-mining recovery on track.

He also said the Reserve Bank would have derived no benefit from lowering rates because it would have squandered an option “that would be better used if a major problem emerges”.

All but two of the 25 economists said rates would rise next year, with 10 forecasting a rate rise in the first half and 13 in the second half.

According to the survey, 21 of the economists said when rates did start rising they would stop before they reached the historical average of about five per cent.

Commonwealth Bank chief economist Michael Blythe said the Reserve Bank would start a “modest tightening cycle” in February that would eventually lift rates to a ‘neutral’ 3.5 per cent.

Peter Munckton from Bank of Queensland said the Reserve Bank was likely to keep rates on hold for the rest of 2014/2015, but that it would most likely cut further if it did make a change.

“The bar for another rate cut is quite high and would require the currency to remain around current levels, the unemployment rate to rise further and momentum in the non-mining economy to stay modest,” he added.

Reserve Bank makes cash rate announcement
Bank1
lawyersweekly logo

Tags:

ABOUT THE AUTHOR


Listen to other installment of the Real Estate Business Podcast

 

Do you have an industry update?

top suburbs

12 month growth
Warren
49.59%
Mullumbimby
49.48%
Waverton
49.18%
Blairgowrie
48.97%
Porepunkah
48.95%
Streaky Bay
48.89%
Bruce
48.67%
Koolewong
48.46%
Failford
48.4%
Victory Heights
48.22%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.