HSBC bucks trend with interest rates forecasts

Thursday 12 May 2011

Article by Mozo

Unlike a number of other major financial institutions, HSBC has forecast that the Reserve Bank of Australia will not increase interest rates until July or August.

HSBC forecasts July rate change

Paul Bloxham, chief economist at HSBC, asserted that the central bank is preparing for a change to the cash rate due to concerns over inflation in the country.

"We stand by our sense that the Reserve Bank of Australia is ready to move (the cash rate higher), but we don't think that it's going to happen this month," he stated.

Among the institutions that have revised their predictions for the date of the rate change to June are the National Australia Bank, Westpac and ANZ.

It has been widely claimed that there will be two increases during 2011, which will take the cash rate above the five per cent mark for the first time since it was reduced from 5.25 per cent to 4.25 per cent in December 2008.

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