Aussies "flummoxed" over future of interest rates

Consumers in Australia are growing increasingly divided in opinion about whether interest rates will be increased or cut by the Reserve Bank of Australia.

This is according to a recent survey conducted by the Westpac-Melbourne Institute, which revealed that less than three-quarters of respondents forecast a rise.

Figures from June this year found that 83 per cent expected rates to rise from their 4.75 per cent level, while in February 91 per cent thought there would be a hike.

Some 29 per cent of respondents asserted that interest rates would be increased by more than one per cent in the next 12 months, up from just over one-quarter in June.

Senior economist at the Westpac-Melbourne Institute Matthew Hassan stated: "The divergence in views reflects the wide variety of factors affecting the rate outlook at the moment."

Last month, Westpac chief economist Bill Evans forecast that interest rates will decline in the coming year.

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