2 September 2014
RBA fails to shock with latest rate decision
Official cash rate stays on hold
The Reserve Bank of Australia has erred on the side of caution once again, opting to leave the official cash rate on hold for the 13th consecutive month.
At its Board meeting earlier today, the Reserve Bank announced it would leave the cash rate at the historically low setting of 2.5 per cent for yet another month.
Mortgage Choice franchisee Des Nation said the Reserve Bank’s decision to leave the cash rate on hold was an obvious one as recent data shows the Australian economy is currently tracking along quite nicely.
“Consumer confidence has started to bounce back, with data from the Westpac Melbourne Institute of Consumer Sentiment showing confidence climbed 3.8 in August to sit just 1.2 per cent below the pre-Budget reading,” he said.
“In addition, business confidence improved, reverting to its post-elections highs, while business conditions rose to their highest level since early 2010.
“Finally, property values continue to climb, with recent research showing capital city dwelling values moved 4.2 per cent higher over the three months of winter. Sydney and Melbourne led the charge, with the capital cities recording dwelling value growth of 5 and 6.4 per cent respectively over the last three months.”
Mr Nation said this spate of positive data suggests the economy is in good shape – providing the Reserve Bank with no impetus to change its current monetary policy setting.
“Moving forward, it is likely the Reserve Bank will continue to leave rates on hold. While new data emerging suggests the Australian economy is performing strongly, the high Australian dollar and rising unemployment woes will force the Board to take a ‘wait and see’ approach to rates,” he said.
“Further, the Reserve Bank has made it abundantly clear that they are happy with the current monetary policy setting and while there is a significant degree of uncertainty about the outlook – given the number of forces working in different directions – the most prudent course of action is likely to be a period of interest rate stability.”
With that in mind, Mr Nation said now is a great time for those with a mortgage to review their home loan and make sure they are still in the most suitable product for their needs.
“Similarly, if you would like to get onto the property ladder, now is a good time to do so, with rates continuing to hover around record lows and Australia’s lenders competing aggressively for business,” he said.
If you would like learn more about your home loan or financial advice options, call Des 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.