Conflicting data a warning to RBA, leave rates alone
By
Tim Neary
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15/03/2010 5:59:00 AM
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2
comments
In a move bound to find favour with brokers, Loan Market Group has warned the RBA - on the back of conflicting economic data - to tread cautiously around continuing to raise official interest rates.
While a number of economists believe Australia has escaped the worst of the GFC there are still indications that we are not out of the woods just yet, said Loan Market's chief operating officer Dean Rushton.
"Increasing interest rates too quickly and frequently could seriously undermine confidence in the Australian economy," Rushton said.
He added that a decline in home loan approvals for the fourth consecutive month clearly showed the RBA's last four rate increases had subdued activity in the housing market.
The RBA's latest increase took the cash rate to 4% and there have been predictions it could go to 5% - or higher - by the end of the year.
Related Story
Rates close to tipping point for first time homebuyers - More than a quarter of people looking to buy their first home in the next two years would give up on that dream if interest rates were to rise by just two percentage points in the next two years.
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Geoff on
15 Mar 2010 11:21 AM
The pain is just starting. Many now struggling.
Get out there and see reality.
Credit Cards; Personnal Loans; Busines loans; Home Loans.
Many consumers have exposure to above so 4 rate rises means 4 plus hits per family.
Never easy but a 5th rise must be it. Forget this normal that and normal rate this. A dip in China; a dip in confidence and see what happens later in year.
greg6547 on
19 Mar 2010 01:27 PM
Why are people hurting so badly. Rates at present aren''t that high. Sorry, but it must be said. Those who took out loans recently, may feel a pinch but those who have had a mortgage for some time know that they are better off now - EXCEPT for those who have chased the bargains, taken "interest free terms", bought hugh TVs and generally chalked up other debt on cards etc. PEOPLE - STOP SPENDING MONEY. Reduce your debt. Capture ALL credit contracts under this new law, store credi, credit cards, terms payments etc. Stop people getting these facilities when they cannot afford them. Gees - what do you have to do ...