subscribe to our newsletter
RBA rate announcement

RBA rate announcement

The Reserve Bank of Australia has revealed the result of its first monthly board meeting since the change of prime minister.

Board members confirmed widespread predictions by leaving the official cash rate at a record-low setting of 2 per cent, where it has been since May.

All 31 economists and commentators surveyed by comparison website finder.com.au had forecast that rates would remain on hold.

Key economic indicators have been pulling the RBA in different directions, which may explain why it decided neither to loosen nor tighten monetary policy.

On the one hand, economic growth is running below trend, after growing just 0.2 per cent over the June quarter and 2 per cent over the year, according to the Australian Bureau of Statistics.

On the other hand, property prices are still surging in Australia’s two biggest cities, with Sydney prices growing 16.7 per cent during the year to September and Melbourne prices growing 14.2 per cent, according to CoreLogic RP Data.

The consensus view is that rates will remain on hold for the rest of 2015 – that was the forecast made by 29 of the 31 survey respondents, with the other two expecting a rate cut next month.

However, it is all but inevitable that rates will start rising again at some point. According to the survey, 60 per cent of respondents believe the first cash rate increase will occur in 2016, while 40 per cent believe it will happen no sooner than 2017.

The RBA has cut rates twice this year – from 2.5 per cent to 2.25 per cent in February and then to 2 per cent in May.

RBA rate announcement
mortgagebusiness logo

Latest News

The removal of APRA’s “redundant” cap on investor lending is unlikely to prompt a rebound in investor credit growth amid continual sof...

The impending Consumer Data Right could iron some of the kinks out of the home loan application process, the chair of the ACCC has suggested...

A big four bank has announced that, by the end of this month, it will no longer offer self-managed super fund loans for new consumer or busi...

Promoted Stories

podcast

LATEST PODCAST: Wayne Byres on mortgages, trusted brands and broker remuneration

Do you expect access to credit to get harder this year?