Economists favour rate cut decision

by BN06 Nov 2012

An overwhelming majority of economists are expecting the Reserve Bank board to reduce the cash rate again today.

A poll conducted by Bloomberg last week found that 20 out of 26 economists expect the cash rate to be lowered once again.

Such a decision that would please a series of industry stakeholders calling for a further rate reduction.

Last week, Aussie Home Loans' John Symond made a public plea for another rate cut, citing the struggle faced by small retailers and businesses as they head into the Christmas season.

“A rate drop will boost retail sales and the rest of the economy – especially employment - providing much needed confidence to consumers," Symond said.

HSBC economist Paul Bloxham is one economist saying although a 'line ball' decision, he expects Reserve Bank concerns over unemployment to trump other concerns, leading to a rate reduction.

Bloxham said whether there is a rate cut in November or December, the RBA is close to the bottom of its easing cycle.