Strong employment figures could scupper rate cuts

Thursday 12 April 2012

Article by Mozo

The pressure is growing on the Reserve Bank of Australia (RBA) to sanction interest rate cuts for the first time in 2012.

Business leaders believe that organisations across the country would benefit if the cash rate was lowered from its current mark of 4.25 per cent.

The bank has not amended the standard rate since December 2011 and some experts feel that further readjustments are nigh.

However, economists have warned that employment figures released by the Australian Bureau of Statistics on April 11th may scupper any potential interest rate reductions.

Levels of unemployment remained steady at 5.2 per cent in March, which could be enough to convince the RBA that no further action is needed.

Senior economist at RBC Su-Lin Ong believes future rate reductions are no longer a forgone conclusion.

"A number like this probably provides the market with a reminder that rate cuts aren't a done deal," he remarked.

Strong employment figures could scupper rate cuts

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