Hi all,
By ANTHONY BLACK
31jul05
THE good news for home loan borrowers is that interest rates are unlikely to be increased when the Reserve Bank board meets on Tuesday.
Economists expect the official rate to remain at 5.5 per cent when the board's decision is released Wednesday morning.
"The odds are pretty much 'London to a brick' the RBA will leave rates unchanged," CommSec chief equities economist Craig James said.
"The major reason is that inflation is under control and the domestic economy has slowed. In particular, the housing market is much more balanced.
"The bottom line is there is no pressing need for the RBA to move rates in any direction."
Mr James said an inflation rate of 2.5 per cent was in the middle of the board's band of 2 per cent to 3 per cent.
He said inflation was unlikely to exceed the top of the band in the next year.
Mr James said annual housing credit growth had fallen to a six-year low in June.
"It wasn't that long ago when the monthly lending figures caused heart palpitations at Reserve Bank headquarters," he said.
"If you strip out petrol and housing costs, inflation is virtually non-existent in Australia."
Warren Hogan, of the ANZ Bank, said the benign inflation rate was enough for the board to keep rates on hold.
The official rate last rose in March -- by a quarter of a percentage point.
News Source
Cheers
Marc
By ANTHONY BLACK
31jul05
THE good news for home loan borrowers is that interest rates are unlikely to be increased when the Reserve Bank board meets on Tuesday.
Economists expect the official rate to remain at 5.5 per cent when the board's decision is released Wednesday morning.
"The odds are pretty much 'London to a brick' the RBA will leave rates unchanged," CommSec chief equities economist Craig James said.
"The major reason is that inflation is under control and the domestic economy has slowed. In particular, the housing market is much more balanced.
"The bottom line is there is no pressing need for the RBA to move rates in any direction."
Mr James said an inflation rate of 2.5 per cent was in the middle of the board's band of 2 per cent to 3 per cent.
He said inflation was unlikely to exceed the top of the band in the next year.
Mr James said annual housing credit growth had fallen to a six-year low in June.
"It wasn't that long ago when the monthly lending figures caused heart palpitations at Reserve Bank headquarters," he said.
"If you strip out petrol and housing costs, inflation is virtually non-existent in Australia."
Warren Hogan, of the ANZ Bank, said the benign inflation rate was enough for the board to keep rates on hold.
The official rate last rose in March -- by a quarter of a percentage point.
News Source
Cheers
Marc