Experts divided on Reserve Bank's next interest rate move
Financial experts and economists are split on whether the Reserve Bank of Australia (RBA) will lift interest rates when it meets next week, according to research released today.
In a survey of 39 experts by the Finder RBA Cash Rate Survey, 56 per cent believe the RBA will hold the cash rate at 3.85 per cent, leaving 44 per cent forecasting an increase.
More than a third of the experts (38 per cent) said the RBA will lift the cash rate by 25 basis points – bringing it to 4.10 per cent in June.
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Experts are divided on whether the RBA will lift interest rates when it meets next week. Nine
The RBA will make the decision at its board meeting next Tuesday.
The central bank paused interest rises in April but restarted the relentless hikes in its shock May decision to raise the cash rate by 25 basis points to 3.85 per cent.
The Australian economy continues to be plagued by stubbornly high inflation, a factor that may sway the RBA towards another cash rate increase.
Figures released this week showed inflation continues to exceed market expectations, rising in April 2023.
New data from the Australian Bureau of Statistics (ABS) showed that on an annual basis inflation rose to 6.8 per cent, up from 6.3 per cent the month prior.
Head of consumer research at Finder, Graham Cooke, said there's growing uncertainty on this month's decision.
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Australia's inflation rate continues to be stubbornly high and may sway the RBA in raising interest rates.. AP
"Our panel continues to be heavily divided – demonstrating the uncertainty in the market around the RBA's strategy.
"Despite the RBA board being heavily criticised due to its unprecedented series of rate hikes, the recent uptick in inflation may be enough to trigger another rate increase.
Looking beyond June, two in three of the experts forecast the RBA to hold the cash rate in July.
Finder's latest research also showed a record 50 per cent of tenants struggled to pay their rent in May.
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Younger renters are far more likely to be affected by the cost-of-living crisis compared with mortgage holders.
And most landlords pass on the full mortgage cost – and more – to their tenants.
National Australia Bank boss Ross McEwan echoed the concerns of other financial leaders and property experts when he said urgent action was needed to raise Australia's housing supply, reports the Australian Financial Review.
He warned there would be a sharp increase in rents and property prices unless drastic changes were made.
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