A declining number of brokers are expecting the RBA to cut rates on Melbourne Cup day, according to a new survey.
The latest Loan Market poll found that 57% of its broker network now predict that the Reserve Bank will maintain the cash rate at its present level of 3.25% at its board meeting next Tuesday.
The decision to reduce the cash rate in October and a rise in inflation during the September quarter are being named as reasons for the lowered rate cut expectations among the group's brokers.
None of the brokers surveyed thought there was a possibility of a larger possible move than 0.25 basis points.
Loan Market spokesperson Paul Smith said a rate hold on Melbourne Cup day would go against the RBA's record.
“The RBA has form on the board for taking action on the first Tuesday in November having moved rates on Cup day every year since 2006,” he said.
“But last week’s inflation data may see the central bank adopt a wait and see approach knowing they can still take some action in December.”
Smith said if the cash rate is dropped to record lows there could easily be a spike in inflation which could result in common costs-of-living going up rapidly, which the RBA was likely to consider carefully.