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A further cash rate cut will provide cautious consumers with the kick they need to move back into the property market, 1300HomeLoan’s John Kolenda has claimed.
Managing director Mr Kolenda said the recent rise in unemployment and benign inflation were valid reasons for the Reserve Bank of Australia (RBA) to offer more interest rate relief at its August 6 meeting.
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“There is room for the RBA to reduce the cash rate again from the current record low of 2.75 per cent,” Mr Kolenda said.
“The RBA’s last rate cut in May and previous reductions have only provided a minor boost. Consumer and business sentiment remains subdued and the economic situation in China and Europe is also weaker.
“The Reserve Bank has plenty of ammunition to get our economy moving forward and it’s time for them to use it again.”
Mr Kolenda said uncertainty over the election timing since Mr Rudd returned as prime minister in June had also hindered economic activity.
“An election announcement by Mr Rudd followed by more action from the RBA would be heartily received by the business community and consumers,” he said.
