RBA 'may cut interest rates by the end of the year'

If current economic trends continue, the Reserve Bank of Australia (RBA) is likely to reduce interest rates later this year, according to an expert from UBS.

Scott Haslem, chief economist at the financial services firm, said consumer behaviour is strengthening the nation's economy, reports the Australian.

He asserted that people are opting to put money into savings accounts and retiring their debts rather than spend their spare capital.

However, he suggested that this may have negative side effects as well, stating: "The recent run of soft domestic data is building a case for the RBA to modestly trim rates by end year."

His view was echoed by the global head of economics at ANZ Warren Hogan, who also forecast that rates would be reduced by the end of the year unless the trends seen in recent months alter.

The last time the RBA reduced interest rates was in April 2009, when they were put down to three per cent, a level maintained for six months.

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