August Reserve Bank Announcement : Rates remain on hold

5 August 2014

 

Positive economic data forces RBA’s hand

Reserve Bank of Australia leaves rates on hold

 

For the 12th consecutive month, the Reserve Bank of Australia has decided to leave the official cash rate on hold.

At its Board meeting earlier today, the Reserve Bank judged it was prudent to leave the cash rate on hold yet again at the historically low level of 2.5 per cent.

“Today’s announcement would have failed to shock industry pundits given that the latest data to come out of the Australian market shows the economy is tracking along quite nicely,” Mortgage Choice franchisee Des Nation said.

“According to the latest data from the Westpac Melbourne Institute of Consumer Sentiment, confidence improved last month, climbing 1.9 per cent in July.”

“In addition, National Australia Bank’s latest Monthly Business Survey found business confidence recorded an unexpected increase, while data from the Australian Bureau of Statistics shows retail sales enjoyed a solid lift - increasing 0.6 per cent.

Mr Nation said this latest spate of positive data suggests consumers and businesses are starting to recover from the Federal Government’s “tough budget”.

“There is a lot of good news coming out of the Australian economy at the moment, which has ultimately encouraged the Reserve Bank of Australia to leave the cash rate on hold for another month,” he said.

“Property prices continue to climb at a steady rate – proving property is still incredibly attractive to Australians. Recent research conducted by RP Data found dwelling values across the combined capital cities climbed 1.1 per cent higher over the last three months.”

Sydney and Melbourne led the charge, with dwelling values rising 2.0 per cent and 1.8 per cent respectively over the three months ending July 2014.

This strong growth has helped bolster the Australian property market as a whole, with the aggregate capital gain now sitting at 5.0 per cent for the year to date across the combined capital cities.

“Broadly speaking, capital city dwelling values have trended higher since June 2012 – with the combined capital cities index recording a cumulative gain of 17.4 per cent,” Mr Nation said.

Given the fact that the Australian economy and property market is currently performing well, Mr Nation said she wouldn’t be surprised to see the Reserve Bank to leave the official cash rate on hold for another few months at least.

“The outlook for the economy remains strong and there is already a significant degree of monetary stimulus in place to support economic activity. As such, it now seems unlikely that the RBA will move rates in the immediate future,” he said.

If you would like learn more about your home loan or financial advice options, call Des Nation on (02) 9833 8177, 0412 709 700 or visit www.mortgagechoice.com.au/des.nation

 

For further information, photos of the new logo, or to arrange an interview, please contact:

 

Des Nation

Mortgage Choice

0412 709 700

Des.nation@mortgagechoice.com.au

 

Important information

This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.

 

About Mortgage Choice

Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.

Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.

Since that time, the company has grown and developed into a fully fledged financial services provider.

Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.

Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.

Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).

Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.

Recent recognition: 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education;   No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.

Visit www.mortgagechoice.com.au or call customer service on 13 77 62.

 
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