Lower interest rates 'will boost consumer confidence'


Wednesday 27 July 2011

Despite recent figures from IBISWorld suggesting that Aussies are better off now than in 2006, one expert has said the average consumer is still struggling financially.

RBA 'should reduce interest rates'

Speaking to Business Daily, Aussie Home Loans chairman John Symond asserted that the Reserve Bank of Australia (RBA) needs to reduce interest rates in order to restore consumer confidence, reports the Herald Sun.

"The average consumer is hurting with momentum in the real economy nearly stopping as households worry about keeping their jobs," he said.

He asserted that many Aussies are concerned about their employment status and said the RBA should make the decision to drop interest rates in the coming months.

Currently, the cash rate is at 4.75 per cent – the level set in November last year – but recently chief economist at Westpac Bill Evans suggested that rates are likely to be dropped within the next 12 months.

However, this view is not held by all, as his counterpart at CommSec Craig James recently told the Sunday Telegraph that interest rates are more likely to rise than fall.

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