Mortgage holders anticipating a reprieve next week may find their hopes dashed, as the Reserve Bank of Australia (RBA) is expected to maintain the cash rate. This consensus comes from a survey of 32 economists and financial experts conducted by Finder, marking the first instance of unanimous agreement regarding interest rates this year. The consensus follows recent inflationary trends and robust consumer spending figures.
If predictions hold, the RBA will conclude its upcoming meeting with the cash rate steady at 3.6 per cent. Graham Cooke, head of consumer research at Finder, noted the central bank is navigating a complex economic landscape. He highlighted that while consumer spending appears strong, rising inflation and increasing unemployment complicate the RBA’s decision-making process.
Experts from the Finder panel suggested that the RBA is aiming for a gradual decrease in the cash rate over time. Tomasz Wozniak from the University of Melbourne emphasised that while the RBA is likely to lower the cash rate eventually, we should not expect a reduction at every meeting.
Interestingly, a majority of the expert panel anticipate a rate cut coinciding with Melbourne Cup Day in November. Seven out of ten believe the RBA may announce its final reduction for the year on November 4, just before the iconic horse race begins.
However, Cooke cautioned mortgage holders to stay prudent, as September’s jump in monthly inflation from 2.8 per cent to 3.0 per cent could prevent immediate rate cuts, particularly if quarterly data mirrors this trend.