Decision time: Brokers expect RBA to push up rates
By
Larry Schlesinger
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1/12/2009 11:00:00 AM
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The consensus among brokers contacted by Broker news is that the RBA will raise rates by 25bps today, however the sentiment is against an increase.
Michael Searle from the Home Loan Centre in Canberra, expects rates to go up, but said the RBA should leave them as is "with Christmas round the corner".
He pointed to the Dubai debt crisis as a sign that things are still fairly fragile. "I hope they don't raise them too quickly next year,' he said.
National Mortgage Brokers managing director Gerald Foley expects a 25bps increase but agreed the RBA should leave rates on hold.
"There has been enough of an increase in recent times...so let the effect take hold. There is no need to fire a shot over bough just yet," he said.
Foley said the RBA would raise rates due to nervousness about coming out of recession too quickly as well as the fact that the next monetary policy decision is not until February.
As to the effect of the increase, he said it would take the wind out of the Christmas sales, but expected it would have little or no impact on the mortgage side of things.
Sean Farley, from Farley Financial in Melbourne, also expected rates to rise but said an increase was needed due to "pretty high auction clearance rates" and because the RBA would not get another chance until February.
"The risks far outweigh the repercussions," he added. Farley said he expected a couple of rate rise mid to late 2010.
Last week, Aussie's John Symond urged the RBA not to raise rates today.
Related stories:
Aussie to RBA: Leave rates unchanged - Aussie Home Loans has urged the Reserve Bank to hold official interest rates at 3.5% at its meeting next Tuesday (December 1, 2009).
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