Is it the bottom of the rate cycle? Economists predict one more cut
ECONOMISTS are reading Reserve Bank governor Glenn Steven’s statement on last Tuesday’s board meeting as fairly non-committal about the future direction of interest rates.
The governor noted that: ‘‘The pace of borrowing has remained relatively subdued, though recently there are signs of increased demand for finance by households’’. He may have been alluding to APRA data that showed strong growth in housing loans, even while the overall growth in housing loans outstanding was subdued as people pay down existing debt.
Many economists believe the Reserve Bank is waiting to gauge the effect of the four reductions in its cash rate so far this year, but due to the persistent sluggishness overall in the economy- mid-level department store sales, rising unemployment - they believe another rate cut is likely, either in November or in February.