Economists still predict cuts to interest rates

Tuesday 17 January 2012

Article by Mozo

Economists still believe that interest rates will be cut again next month, despite the fact Aussies appear to be more confident about using credit.

CommSec's chief economist Craig James told the Herald Sun that people were keen to enter the property market in November, which may have been due to the 0.25 per cent rate adjustment.

A second cut of 0.25 per cent was also made in December, but Mr James feels there is still room for further reductions even though the first two changes appear to have had a positive effect.

He said new inflation and employment figures show that interest rates need to be trimmed again when the board of the Reserve Bank of Australia meet in February. ANZ's job advertising index indicated that the number of roles being made available shrunk by 0.9 per cent in December.

"(This) keeps alive the chance of a February rate cut," he was quoted as saying.

Economists still predict cuts to interest rates

Figures released by the Australian Bureau of Statistics recently suggested that the interest rate adjustments were most graciously received in New South Wales, where home loan uptake increased by 4.2 per cent in November.

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