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Mortgage businesses can rest easy for another month as the RBA left rates unchanged this afternoon.
Recent signs of an economic slowdown as a result of stifled retail and housing performance figures during May were key factors behind the RBA board’s decision to leave rates unchanged.
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The RBA last raised rates in March by 25 basis points to 7.25 per cent, but the next hike may not be far off.
Fariborz Moshirian, professor of Finance at the UNSW’s Australian School of Business and editor of the Journal of Banking Finance, told Mortgage Business that the industry should expect another rate rise in 2008.
He warned that the economy continued to be pressured by inflation, increased food and oil prices.
“Tax cuts will also stimulate economic growth and take away the effects of increased interest in recent months,” said Mr Moshirian.
“Australia can expect to see higher interest rates unless there is a global recession.”
Published: 01-07-08
