A month ago the same economists were very certain that the next interest rate rise would be this month. Now they have changed their minds and deferred the threatened rise to March. Will they change their minds in March again? Continual threats and predictions of imminent rises from many quarters over the past 12 months are starting to look a bit thin.
Low ( or is this now the new “normal?) interest rates are good for the market as uncertainty can be very destabilising for any type of business, not only property.
Tame inflation expected to keep rates on hold.
Friday Jan 17, 2014
Interest rates are expected to remain on hold until March.
The Reserve Bank and market economists are near agreement that inflation remained tame in the fourth quarter, keeping intact expectations that the official cash rate doesn’t need to rise from a record low until March.
The consumers price index fell 0.1 per cent in the final three months of 2013, for an annual rate of 1.5 per cent, according to a Reuters survey of 11 economists. The Reserve Bank forecast a 0.2 per cent decline in the quarter for an annual 1.4 per cent in its December monetary policy statement. The data is due for release on Jan. 21.
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