Australia's top economists united in RBA rate hold: Finder survey

Australia's top economists united in RBA rate hold: Finder survey
Australia's top economists united in RBA rate hold: Finder survey

Australia’s top economists were united in forecasting the cash rate would be held at the July cash rate meeting.

Here’s what the experts had to say:

Jordan Eliseo, ABC Bullion: "The RBA's view on monetary policy is clearly changing, with a more dovish tone at the very least pushing back the timeframe for rate hikes, if not already opening the door to an eventual rate cut, which is still our base case in the coming months. Growth figures and employment levels are still reasonable though, so they'll continue to take a "wait and see" approach for now."

Tim Nelson, AGL Energy:"No change in underlying data from previous month."

Shane Oliver, AMP Capital: "There is no strong case to move either way just now. Signs that mining investment may bottoming, strengthening non-mining investment, surging infrastructure spending and rising export volumes all argue against a rate cut but peaking housing investment, uncertainty around consumer spending, continuing weak wages growth and inflation, falling Sydney and Melbourne property prices, tightening bank lending standards and global uncertainty around trade all argue against a hike. So it’s best for the RBA to remain on hold - for the 23rd month in a row."

Alison Booth, ANU:"Fundamentals don't yet warrant any change."

Malcolm Wood, Baillieu Holst: "Inflation at low-end of band; housing market rolling over; consumption uncertainties."

Richard Robinson, BIS Oxford Economics:"There are no inflationary pressures, while house prices are now undergoing an orderly and much needed downward adjustment."

Paul Dales, Capital Economics: "There are still very few signs that inflation is going to rise back to the middle of the RBA's 2-3% target. And more recently, the RBA is becoming more concerned about the hit to the economy from the global trade dispute and domestic Banking Royal Commission."

Saul Eslake, Corinna Economic Advisory Pty Ltd: "The RBA will not have changed its overall view of the outlook for the Australian economy sufficiently to warrant either raising or lowering the cash rate. Economic growth (Q1 GDP) was a bit stronger than the RBA had been anticipating at the last meeting - and is arguably now back to its 'trend' pace. But the RBA's commentary on prospects for wages growth seems to have become a bit more pessimistic."

Tim Moore, CUA (Credit Union Australia): "Until we see a strong trend in unemployment dropping toward the magic 5% level, we will continue to see low level inflation and low wage growth, therefore the RBA remaining on the sidelines. Whilst the RBA have clearly communicated their next move to be up, they have also caveated this with comment that they do not see this anytime soon."

Peter Gilmore, Gateway Bank Ltd:"Key economic fundamentals are still short of the levels the RBA traditionally needs to trigger a rise."

Peter Haller, Heritage Bank:"There is no justification for a rate change at the present time." Shane Garrett, Housing Industry Association:"No grounds for monetary intervention in the short term."

Alex Joiner, IFM Investors: "Despite good headline economic growth data the RBA clearly requires better wages growth to underpin what is still a weak inflationary pulse, consumer spending and household balance sheets."

Michael Witts, ING:"No change on the horizon from the RBA, the next move will be up built a long way away."

Leanne Pilkington, Laing+Simmons: "The hold pattern remains appropriate in the current 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."

Stephen Koukoulas, Market Economics​: "It has told the market it will be on hold until it has more economic information."

John Caelli, ME: "The RBA has indicated they are in no rush to change policy."

Michael Yardney, Metropole Property Strategists:"The RBA will hold interest rates steady because there has been no change to the economic outlook since last month. In fact rates are unlikely to rise until wages rise and that seems quite some way off."

Mark Crosby, Monash University: "RBA has signalled that it will hold for the next few meetings, unless a significant shock hits the economy."

Dr Andrew Wilson, My Housing Market:"There remains no clear case for change, particularly given clearly weakening Sydney and Melbourne housing markets, continuing mixed local economic data and concerns over the global economy and rising trade barriers.”

Alan Oster, NAB:"Waiting regarding data on wages and the consumer. Need lower unemployment rate. Inflation no pressure yet."

Matthew Peter, QIC:"Philip Lowe has made it quite clear that the Bank will not be raising rates while annual wage growth languishes around 2%. He also has made it clear that there is no chance of a rate cut while household debt and house price remain elevated. The RBA can't cut and they can't hike."

Nerida Conisbee, REA Group: "Businesses are confident but consumers aren't. Until this turns around, I think it is unlikely we will see an interest rate rise."

Christine Williams, Smarter Property Investing:"As much as the housing market has seemed to retract slightly there has been no major impact on the buying pool within the $500-$850K range. This range suits most first home buyers. Our unemployment rate has reduced slightly with the national rate around 6%. Whilst we are at this rate I doubt interest rates will move."

Janu Chan, St.George Bank:"Ongoing strong conditions in the business sector and the high level of public infrastructure spending will support economic activity and employment growth. However, there is ongoing spare capacity in the labour market and wage growth and inflation is expected to remain low."

Brian Parker, Sunsuper: "Growth is improving, but not fast enough to deliver the much needed improvement in labour force underutilisation and wages growth."

Clement Tisdell, UQ-School of Economics: "No significant change in Australia's economic situation."

Mark Brimble:"We're not likely to see a movement for a long time, and the direct of that movement will depend on international markets so it's too early to tell which way it will go."

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

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