RBA leaves rates on hold throughout 2014
Sluggish sentiment forces Reserve Bank of Australia’s hand
The Reserve Bank of Australia has once again left rates on hold, meaning the official cash rate has not changed once throughout the course of the year.
At its Board meeting earlier today, the Reserve Bank said poor consumer sentiment teamed with sluggish business confidence was enough to warrant leaving the cash rate on hold at 2.5 per cent.
This is the 16th consecutive month that the cash rate has been left on hold.
Mortgage Choice franchisee Des Nation said while the Reserve Bank indicated that it is in a position to cut interest rates again, the Board has obviously decided to err on the side of caution and leave the cash rate untouched yet again.
“It would appear that the Reserve Bank believes a further rate cut is not necessary at this time,” he said.
“Over the last month, we have seen a slight improvement in consumer confidence and business conditions.
“According to National Australia Bank’s latest Monthly Business Survey, business conditions jumped in October, marking the largest monthly increase in the history of the survey.
“But while business conditions were good, business confidence suffered a further fall in October suggesting firms remain uncertain over the near-term demand in their industry.
“At the same time, the Melbourne Index of Consumer Sentiment rose by just 1.9% in November to 96.6, meaning pessimists continues to outweigh the number of optimists – a fact the Reserve Bank is acutely aware of.
“So while some areas of the economy are improving, others are struggling and the Reserve Bank feels as though the best course of action is to leave rates on hold.”
Moving forward, Mr Nation said with rates still on hold and set to stay this way for the short term, now may be a great time for potential property buyers to jump onto the property ladder.
Alternatively, now may also be a good time for those with a mortgage to review their current home loan situation and see whether or not there is a better deal out there for their needs.
“Australia’s lenders are competing aggressively for business at the moment, so if you haven’t refinanced or reviewed your mortgage in recent years, now may be a great time to do so,” he said.
If you want to learn more about your home loan options, call us on (02) 9833 8177 or visit www.mortgagechoice.com.au/Des.Nation
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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: 2014 Australian Broking Awards Best Diversified Program; 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.