Macquarie: Reserve will continue rate cutting spree

Mozo

Monday 26 January 2009

The Reserve Bank will continue to hack away at interest rates as the new year gets underway, Macquarie’s chief rates strategist has claimed.

In a special report from the Sunday Telegraph, Rory Robertson claimed that while the bank would surely like to put down the scissors and leave rates alone, its hand will be forced by increasingly gloomy statistics on the health of the economy.

The cuts well may find favour with the nation’s first-home buyers, although savings accounts interest rates are likely to fall along with home loan rates.

The loans expert also forecast a sharp decline in inflation as unemployment figures rise and consumers look to keep hold of their cash.

“With retail demand weak and fuel prices, air fares and car prices all having dropped sharply in recent months, inflation is clearly falling fast,” he insisted.

The Reserve Bank will meet again to discuss another possible rate cut in February after a month-long break.ADNFCR-1761-ID-18992277-ADNFCR

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