Australia to experience 'shallow recession'

Consumers looking at home loan rates may take some comfort from comments made this week concerning the recession.

Reserve Bank of Australia (RBA) chief Glenn Stevens remarked to parliament’s economics standing committee that the recession in Australia would be minor.

This is thanks to government stimulus and Australia’s large resources sector that will help the economy pull through, which may be welcome news to borrowers looking for low interest home loans.

Mr Stevens said: "On the basis of the information to hand at present, this may well turn out to be one of the shallower recessions Australia has experienced.

"The economy appears to be weathering a very large storm pretty well."

He went on to add that the country’s confidence was also beginning to improve, with low interest rates and inflation, as well as a plateau in the unemployment rate.

Meanwhile, an article in the AAP recently speculated that interest rates may rise in 2010.

The news provider cited Access Economics director Chris Richardson, who predicted one more rate cut before interest increases over the next two years.

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