The experts surveyed by Finder made the following predictions:
Garry Shilson-Josling, AAP
“…The recovery will be slow so there’s no need to put the brakes on with a rate rise just yet. The outlook is highly uncertain, but in the absence of a major global shock the RBA should start lifting rates again after a fairly long wait as the economy slowly gathers pace…”
Predicts rates will change: Late 2015
Shane Oliver, AMP
“…The Reserve Bank has cut interest rates to record lows…to boost the rest of the economy, and there’s spectative evidence that it’s working, but it’s still tentative… The most recent budget has had a negative impact on confidence, and that’s thrown a bit of a spanner in the works…”
Predicts rates will change: Late this year or early next year
Warren Hogan, ANZ
“The economy is playing out as expected … essentially monetary policy is set to remain on hold for an extended period of time.”
Predicts rates will change: Next year, possibly first half of 2015.
Steven Pambris, Bank of Sydney
“…The measures announced in the budget were as per our expectations with contractionary impact already reflected in the drop of consumer confidence in the latest surveys. We see that the current record low interest rates will have to continue for some time and in line with our previous position do not expect any movement in rates in 2014, if any more likely in March 2015”
Predicts rates will change: March 2015
Michael Blythe, CBA
“The economy appears to be improving, but there’s still a lot of uncertainty of course so it’s the RBA’s preference to wait and see what happens…”
Predicts rates will change: November 2014
Craig James, Commsec
“…At the end of the day, the Reserve Bank wants to keep inflation between 2.03%… As each month passes it does appear clear the Reserve Bank wants interest rates to remain where they are for a long period of time…”
Predicts rates will change: November/December 2014, maybe early 2015
Don Magin, Greater Building Society
“…There is no sign of inflation. The RBA will be particularly concerned about pressure on capital expenditure. The good GDP growth we saw in 2012, based on investment by the mining sector, has subsided…”
Predicts rates will change: Mid-2015
Paul Williams, Heritage Bank
“The RBA appears happy with current rate settings while the domestic economy tries to build some momentum. The RBA will be keeping an eye on the trends in unemployment, the strength of the Australian dollar, inflation levels, developments in key offshore economies, as well as rising tensions in the Middle East…”
Predicts rates will change: Well into 2015
Paul Bloxham, HSBC
“…Economic growth is still underway and interest rates will remain at record lows – which is where they are now.”
Predicts rates will change: Around the end of the year, around Q4
Michael Wills, ING Direct
“…It is difficult to see a scenario in which the RBA would change the cash rate… Equally compelling scenarios can be constructed to support both an increase and a decrease in the cash rate… Rates are on hold for an extended period that could extend into the first quarter of 2015.”
Predicts rates will change: Could extend into the first quarter of 2015
John Caelli, ME Bank
“…Growth remains moderate and consumer confidence has taken a hit following the Federal Budget. The uncertainty over the Budget process will cloud the outlook for a period of time. The next likely rate change will be in the first half of 2015 and is likely to be up.”
Predicts rates will change: First half of 2015
Glenn Levine, Moody’s Analytics
“…Inflation is within target and the economy is expanding slightly below potential… Tepid wage growth and a slightly looser labour market will help to keep inflation within target… The next move will likely be an interest rate increase around the middle of 2015 as we expect certain parts of the economy to be bumping up against capacity constraints by this time.”
Predicts rates will change: Mid-2015
Jonathan Chancellor, Property Observer
“…I still think the next rate change won’t be until 2015, although the RBA historically likes to surprise. Let’s see how the federal budget aftermath works it way through the economy after the new Senate in July takes effect. Consumer sentiment is still at its lowest level in almost three years…”
Predicts rates will change: 2015
Nathan McMullen, RAMS
“…Monetary policy settings remain mildly expansionary relative to long run averages and are appropriate given the current outlook for inflation… We continue to expect the RBA to keep interest rates on hold through the remainder of 2014 and much of 2015.”
Predicts rates will change: Q4 2015
Janu Chan, St. George Bank
“…On the one hand interest rates are quite low, and they are helping to support the economy, but at the same time there are some risks on the horizon… The strong growth that we saw in Q1… We’ll not be sustaining that momentum in Q2…”
Predicts rates will change: November of this year, but this could be delayed until early 2015.
Scott Haslem, UBS
“…We’re seeing signs of improvement within the non-mining economy. The overall outlook for the economy is contained… The economy is not showing enough improvement for concerns of inflation…”
Predicts rates will change: Not until 2015
Nicki Hutley, Urbis
“…A solid first quarter economic performance is likely to be followed by a bit of a stumble in the second quarter of 2014, on the back of weaker consumer confidence and demand following the Federal Budget… The RBA will want maintain its watch and wait stance for at least another quarter…”
Predicts rates will change: Q4 2014
Bill Evans, Westpac
“…The terms of trade will have fallen in Q1 while the AUD has remained stubbornly high. We retain our forecast for an improvement in the condition of non mining equipment investment from a contraction of 11.5% in 2013 to a modest lift in 2014 of 3.4%…”
Predicts rates will change: Third quarter of 2015, with a 25 basis point hike in both the September and December quarters
This article first appeared on Property Observer.
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