No move is expected to be made on the official cash rate by the Reserve Bank of Australia today, but experts are betting on a rate rise by the end of this year.
According to a monthly reserve bank survey by comparison website finder.com.au, 12 of Australia’s leading economists unanimously expect the official cash rate to remain unchanged on Tuesday.
But five out of the 12, including economists from Commonwealth Bank, National Australia Bank, HSBC, St George Bank and AMP, are betting on a rate rise by the end of this year.
A further three experts from ANZ, Bank of Sydney and RAMS are predicting the next rate change will be in 2015, while four were unsure of the next rate move.
Finder.com.au spokeswoman Michelle Hutchison said despite a steady outlook for most of this year, borrowers need to watch their lenders closely as several variable rate home loans have moved out of cycle this year.
“Our monthly survey of leading experts suggests that it will be at least four months before we will see any movement to the cash rate by the Reserve Bank. However, that doesn’t mean your variable home loan rate won’t change.”
Five lenders increased their rates on seven home loans by up to 0.10 percentage points this year, including Citibank, Homeloans, HSBC, Loans.com.au and Westpac.
Seven lenders dropped 20 home loans this year by as much as 0.17 percentage points.
“It’s even more unusual to see variable home loans rise out of cycle because most lenders haven’t passed on the full rate cuts of the past two years, which could be an indicator that the cash rate may rise next week or if not, later this year,” Hutchison said.
Meanwhile, across the ditch last week the Reserve Bank of New Zealand raised its official cash rate for the second time in two months, lifting rates to 3% as it forges ahead with a policy-tightening cycle to ward off an inflation threat.
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