Rate cut hopes dwindling

by Adam Smith01 Mar 2013


Consumers have lost hope for a rate cut in March, a new survey suggests.
With the RBA due to meet on Tuesday, a Loan Market survey has found the majority of borrowers aren't expecting any rate relief.
Fifty-three per cent of the survey's respondents said they expected the Reserve Bank to leave rates on hold for March, while 39% predicted a 25bp cut. Loan Market spokesman Paul Smith said indications from the RBA seem to line up with consumers' expectations of a rate hold.
"The RBA has released some firm statements in the past several weeks that indicate the cash rate will be held constant in the short term and used in reaction to any economic indicators falling below targeted ranges," he said.
Smith said homeowners seemed well-attuned to economic conditions. He pointed to a survey by the company last month, in which 55% of respondents correctly predicted that the Reserve Bank would remain on the sidelines.
"Consumer confidence has been varied for some time but these survey results indicate that home owners are aware of the multitude of facts the RBA considers when it asses the cash rate and the impact it can have on their home loans and deposited savings," he said.