Sept 01, 2015 | Kirsten Robb | Domain
The official interest rate remained on hold at 2 per cent on Tuesday but economists say the Reserve Bank of Australia may be forced to cut rates by November, making Melbourne Cup day a winner for mortgagees and spring buyers.
The move to keep rates steady was widely expected, with experts agreeing the central bank is taking a ‘wait and see’ approach after cutting in February and May.
Both AMP chief economist Shane Oliver and Domain senior economist Andrew Wilson forecast a cut to 1.75 per cent to come on the first Tuesday in November.
“I think if it’s going to come, it will probably be November,” Dr Oliver said.
“On balance, the RBA will be forced to cut interest rates again. The reason is the economy is continuing to run at a very sub-par pace.”
The economy is continuing to run at a very subpar pace. Dr Shane Oliver
Dr Oliver said business investment figures released last week suggested a bleak outlook and unemployment was drifting back up modestly, giving the RBA pause for concern.