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ISCOVER
Staff Reporter
Despite a slight uptick in employment numbers, industry spectators still expect the Reserve Bank to cut rates again in the near future.
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Speaking to The Adviser, CUA's group general manager strategy and marketing Andrew Hadley said uncertainty abroad and low consumer confidence could force the RBA's hand on rates.
"While one rate cut will help, I don't know if it will be enough to bring potential home buyers back to the market," he said.
"Also, the Reserve Bank rarely cuts rates once. History shows us that when they cut rates, they do so two or even three times in a row, so I expect rates to fall again soon."
But while Mr Hadley expects the Reserve Bank to continue to ease its stance on monetary policy, AMP's chief economist Shane Oliver said our official cash rate will still remain high in comparion to other countries around the globe.
"The public debt problems in Europe, the US and Japan – and resultant budget cutbacks and tax hikes – are likely to constrain growth in these countries for years to come. This is likely to see interest rates stay near zero for at least the next two or three years. It is also likely to see further quantitative easing.
"The end result will be that Australian interest rates will remain well above those available in traditional advanced countries (providing an inducement to park funds in Australia) and the supply of US dollars, Yen, euros and pounds will rise relative to Australian dollars – all of which will result in long term upwards pressure on the $A," he said.
