Big Four moves may spur interest rate cut: CoreLogic RP Data

Moves by the Big Four banks to lift standard variable mortgage rates across owner occupier and investor mortgages may give the Reserve Bank enough reach to cut official interest rates in the near future, according to CoreLogic RP Data.

CoreLogic RP Data's latest Property Pulse said the latest CPI data also provides the RBA with the scope to cut official interest rates if they feel that it is necessary. 

"The ASX cash rate futures market is currently pricing in a 31% chance of an interest rate cut in November with an expectation that the cash rate will fall by 25 basis points by February next year," the report noted.

"Moves (by the Big Four banks) will act as a further disincentive to buyer demand across the housing market and will provide the RBA with scope to cut official interest rates further if required over the coming months."

"The RBA also likes to look at underlying inflation which strips out some of the more volatile items. The two measures of underlying inflation, the trimmed mean and weighted median, were both recorded at 0.3% over the quarter. Over the past year, the trimmed mean was recorded at 2.1% and the weighted median at 2.2% both of which are at the lower end of the RBA’s target range for inflation. Given this the latest CPI data provides the RBA with the scope to cut official interest rates if they feel that it is necessary."