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ISCOVER
Staff Reporter
The RBA is expected to keep rates on hold when it meets tomorrow.
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Last week’s soft data is encouraging the Board to keep rates on hold. Underlying inflation came in below expectations, while credit data was also weak – with business lending particularly soft.
According to the Australian Bureau of Statistics, underlying inflation for the year to September eased to a five year low of 2.4 per cent – dropping to the bottom half of the RBA’s 2 to 3 per cent target band.
NAB’s group chief economist Alan Oster said based on these results, the Board will wait a bit longer for more data to validate their medium term forecast.
“Evidence the economy is growing above trend again should be sufficient for them to hike - a fall in the unemployment rate through 5 per cent on November 11 would satisfy this criteria and make a December 7 rate hike likely,” Mr Oster said.
