RBA 'should be cautious with interest rates'

By Mozo ·

Raising interest rates in June, as many economists have tipped the central bank to do, would be a "dangerous" move, one expert has stated.

Shane Oliver, chief economist for financial firm AMP, told the Herald Sun that pushing up the cash rate may put too much pressure on Aussie households.

Currently, the rate is set at 4.75 per cent, but experts at Westpac, ANZ and the National Bank of Australia revised their forecasts earlier this month to predict that the Reserve Bank of Australia (RBA) would increase this in June.

"House price softness, along with weak consumer spending and low levels of confidence regarding family finances, suggests households are already struggling and are good reasons for the RBA to tread cautiously," Mr Oliver asserted.

He explained that the economy is still in a "soft patch", adding that property in the nation may be overpriced.

The RBA board is set to meet on June 7th to make a decision about whether or not to increase the cash rate.

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