Chances of Interest Rate Cuts are Less As Economy Slows Down
The interest rates are unchanged to 2 per cent since rate cut in May. The next board meeting is on November 3, and the expectations are that the rate will still remain unchanged.
Westpac’s chief economist Bill Evans says, “The Reserve Bank is unlikely to deliver a Melbourne Cup Day interest rate cut because the Australian economy faces below-trend growth in 2016”.
According the new research it has been come to know that growth in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, remained stuck below trend for a fifth month.
“Trend growth in the economy next year was now likely to be nearer to 2.75 per cent than three per cent, but better than the annual pace of 2.0 per cent recorded in the June quarter”, said Mr Evans.
He further added, “The key drivers behind expectations of a modest lift in growth in 2016 included a rise in consumer spending, increased exports and improvements in investments outside the mining sector. These positive factors will be partly offset by a slowdown in dwelling investment from 10 per cent to 2.2 per cent as the residential building boom reaches its peak”.
News Source: https://au.finance.yahoo.com/news/slower-economy-lowers-chance-rate-050514104.html