The Reserve Bank of Australia is expected to announce its third cut in interest rates, after holding its rate in July despite the easing inflation. Photo: NewsWire\/ Gaye Gerard <\/p>\n
The Reserve Bank of Australia is expected to announce its third cut in interest rates, after holding its rate in July despite the ongoing ease in inflation.<\/p>\n
According to a new Finder survey, 91 per cent of economists believe the RBA will cut the cash rate following its two-day meeting, which begins on Monday, with a 25 basis point cut bringing the cash rate down from 3.85 per cent to 3.60 per cent.<\/p>\n
Homeowners could be receiving positive news on Tuesday afternoon. Picture: NewsWire\/ David Crosling <\/p>\n
The cash rate was held firm last month, with RBA governor Michele Bullock explaining the decision was about \u201ctiming rather than direction\u201d, and was waiting on more data to confirm the decreasing inflation.<\/p>\n
At the end of July, the Australian Bureau of Statistics (ABS) published its quarterly inflation figures, which fell from 2.4 per cent to 2.1 per cent between March and June.<\/p>\n
Trimmed inflation, also known as underlying inflation, also dropped from 2.9 per cent to 2.7 per cent.<\/p>\n
Both headlining and underlying inflation rates are now within the RBA\u2019s 2-3 per cent target band, indicating inflation is low enough for the RBA to move forward.<\/p>\n
Governor Michele Bullock said the Bank was awaiting on more data before moving ahead with the interest rate cut. Photo: NewsWire\/ Gaye Gerard <\/p>\n
Mortgage holders are likely to be the biggest winners if the official cash rate is reduced on Tuesday.<\/p>\n
A homeowner with a $500,000 mortgage are set to save $2884 per year if the cash rate is passed on in full.<\/p>\n
Fnder head of consumer research Garahm Cooke said the RBA\u2019s failure to cut rates lash month was a disappointment for mortgage holders.<\/p>\n
\u201cIf the RBA doesn\u2019t cut next week, they are risking an all-out attack on their legitimacy in the eyes of many homeowners,\u201d he said.<\/p>\n
\u201cLast month\u2019s decision to hold shocked the market, and we are now seeing a 90 per cent plus certainty of a cut. With inflation well within the target range, there is no reason to hold.<\/p>\n
\u201cBanks will be under intense scrutiny to pass on a cut in full,\u201d he said.<\/p>\n
Despite the overwhelming majority of economists predicting the fall in interest rates, University of Sydney\u2019s Stella Huangfu suggested the RBA should hold out for two reasons.<\/p>\n
\u201cFirst, June quarter trimmed mean annual CPI inflation is still 2.7 per cent, which is high within the 2\u20133 percentage target band and slightly above the RBA\u2019s forecast of 2.6 per cent,\u201d she said.<\/p>\n
\u201cSecond, the RBA has already cut rates twice this year, giving it scope to pause and assess the impact before moving further,\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank of Australia is expected to announce its third cut in interest rates, after holding its…\n","protected":false},"author":2,"featured_media":57727,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164,42414,5626,183],"class_list":["post-57726","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy","tag-inflation-rates","tag-interest-rates","tag-reserve-bank-of-australia"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/57726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=57726"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/57726\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/57727"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=57726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=57726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=57726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}