Interest rates on hold to start the year

The Reserve Bank of Australia has kicked off its first Board meeting for the year with more cash rate stability.

At today’s Board meeting, the Reserve Bank of Australia decided it was prudent to leave the official cash rate on hold, marking the ninth consecutive month that the cash rate has been left at 2%.

While there was some small talk of a move in rates today’s decision by the Board was unsurprising.

While there is still scope for the Reserve Bank of Australia to cut the cash rate over the coming months, the trigger for an immediate cash rate cut was not there this month.

Although data from CoreLogic RP Data shows Perth property values declining by 1%, nationally the result was a 0.9% increase over the month of January.

See the full RP Data report here

In addition, business confidence and conditions remain surprisingly robust, while underlying inflation remains within the Reserve Bank’s target band range.

New data from the Australian Bureau of Statistics found the key measures of underlying inflation rose by 0.55% on average throughout the fourth quarter, while annual inflation hit 2% - still within the Reserve Bank’s 2%-3% target band range.  

Moving forward, the Reserve Bank will continue to keep a close eye on inflation, property prices and consumer confidence.

While the latest spate of economic data has given the Reserve Bank no reason to cut rates, who knows what tomorrow will bring. With that said, it is impossible to rule out future rate cuts at the moment.

At present, consumer sentiment is sluggish and it could fall further still, which would provide the Reserve Bank with the incentive they need to cut the cash rate.

According to the latest data from the Westpac Melbourne Institute of Consumer Confidence, sentiment dropped 3.5% over the month of January, taking the Index to its lowest level since September 2015.

Regardless of what happens with the cash rate in the future, interest rates continue to hover around record lows, making now a good time to buy, invest or upgrade.

For anyone who isn’t happy with their current home loan provider or feel as though they could be getting a better deal, now is also a great time for property owners to review their home loan and make sure they are still in the right product for their needs.

If you want to book an appointment or are just interested in having a chat, feel free to either call Jason Coviello on 0438 211 745, or send through any questions via email to jason.coviello@mortgagechoice.com.au

If you’d rather be social about it, feel free to head across to myFacebook Page and see if there’s already an answer to your question or pm me.

 

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