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ISCOVER
Staff Reporter
A majority of Australians expect the Reserve Bank (RBA) to deliver an early Christmas present and cut the cash rate a further 25 basis points, new research has revealed.
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According to a poll by Loan Market Group, 72 per cent of respondents expect the cash rate to fall again in December.
Loan Market corporate spokesman Paul Smith said 69 per cent of the 907 online respondents tipped the RBA to next week lower the official cash rate by 25 basis points.
Mr Smith said three per cent of those surveyed thought the RBA could cut by as much as half a percentage point – which would take Australia’s cash rate to an all-time low of 2.75 per cent.
“It’s becoming clearer that the previous rate cut in October and the consecutive cuts in May and June aren’t lifting the struggling sectors of the economy and haven’t been enough to combat the high Australian dollar and slowing inflation rate,” he said.
Mr Smith added that 27 per cent of respondents believe the RBA would hold fire again, while just one per cent said there could be a rate rise of 25 basis points.
“The RBA delivered a pre-Christmas rate cut last December and it provided much needed savings to mortgage holders over the holidays,” Mr Smith said.
“Obviously, home owners will welcome a rate cut but all eyes will again be on lenders to see how much of any Christmas rate cut is passed on.
“A rate cut will be welcomed by the retail sector and the housing market. We have already had a full percentage point reduction in the cash rate during 2012 and while this has heightened some enquiry levels, consumers remain very cautious in regards to spending.
“One of our recent surveys showed more than 40 per cent of consumers had more interest in purchasing property as a result of the previous rate cuts and further relief from the RBA will only enhance this sentiment.”
Mr Smith added that while the cash rate is close to historic lows, the RBA still has more room to move than most of the world's other central banks.
