Economist don’t foresee RBA cash rate cut in August and rate cut also unlikely in September: Bloomberg survey

Economists are nearly all in agreement that the RBA will leave the cash rate unchanged at 3.5% at its next board meeting on August 7.

Twenty out of 24 economists polled by Bloomberg just before the weekend expect the RBA to continue to hold fire, up from 15 in the previous survey, a week prior.

Key data that may influence the RBA’s decision on the cash rate includes the release of private credit growth figures on Tuesday, building approvals data on Tuesday, capital city house price figures on Wednesday and retail trade figures on Thursday.

The prospects for a September rate cut are better, but also slim, with 17 out 24 economists expecting the RBA to hold fire again.

There are some prominent economists tipping a rate cut in August.

Shane Oliver, chief economist at AMP Capital Investors, expects the RBA to cut the cash rate by 25 basis points on August 7 as does Stephen Koukoulas from Market Economics.

Koukoulas is by far the most bullish economist on the cash rate among those surveyed by Bloomberg.

He is forecasting the cash rate to fall to 2.75% by year end and to fall another 25 basis points to 2.5% in the first quarter of 2013.

The majority of economists (13 out of 24) expect a cash rate of 3.25% in the first quarter of 2013.

Those readers thinking about refinancing their home loan should sign up for Property Observer’s free webinar: Refinancing and the interest rates riddle, taking place on Tuesday, 31 July a 12:30pm AEST.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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