Only one more rate rise in 2010, says Citibank
By
Kevin Eddy
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18/06/2010 12:00:00 AM
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Citibank believes the RBA will only introduce one more interest rate rise before the end of the year.
The bank’s chief economist, Paul Brennan, said the RBA will hold off on any more rate rises for at least three months, in line with the consensus view. However, while other economists believe that two rate rises will occur before 2011, Brennan believes only one will be likely.
“The RBA’s view is that interest rates are pretty much back to normal, and as such it can pause for a while: the question is how long they might pause,” said Brennan.
“However, one of the things that is missing from public debates at the moment is that, while the lending rates are back to normal, the debt service levels households are carrying are well above average. That's because debt’s been going up. That, combined with the rapid normalisation of lending rates, leads us to believe that there will be a longer pause than some of our colleagues in competitor firms are predicting.”
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Andrew on
18 Jun 2010 04:20 PM
Here''s hoping that''s true, I am seeing more and more people every month that seriously can''t afford their current debt levels.