Underwhelming housing finance data and a drop in consumer confidence stress the need for the Reserve Bank to lower the official cash rate, according to one wealth group.
Cigna Wealth managing director Kent Leicester said that while statistics released by the Australian Bureau of Statistics show that the number of home loans approved for July rose by 0.3 per cent, it was well under the market expectation of a 0.7 per cent increase.
Mr Leicester said the RBA should also be concerned by the latest Westpac-Melbourne Institute index which showed that consumer confidence dropped 5.6 per cent in September.
“Continuing stock market volatility, weak domestic economic data and concerns about China’s slowdown and the refugee crisis in Europe are all weighing heavily on consumer sentiment,” he said.
“The RBA still has more room to move than most other central banks around the world, so we could see another rate cut, perhaps as soon as next month or on Melbourne Cup day in November,” he said.
“The central bank has form on the board for taking some action on Cup day.”