Mortgage holders hoping for further relief on interest rates when the Reserve Bank of Australia meets next week will be disappointed, according to new research.
The board meeting starting next Monday will be the first since the RBA made its long-anticipated cut last month, bringing the cash rate down to 4.10 per cent.
Now a Finder survey of 34 economists has found two out of three think the central bank will keep the cash rate on hold when the RBA announces its decision on Tuesday afternoon (AEDT).
It’s a big shift in sentiment from hopes last month’s cut would kick off consecutive cash rate reductions through this year.
Finder head of consumer research Graham Cooks said it looked like mortgage holders will have to hold out until May for the next cut.
“The February cut signalled a turning point for many cash-strapped borrowers – they hoped a couple more would be coming thick and fast,” he said.
“New inflation figures show headline inflation is within target range, so while we’re unlikely to see a second rate cut in April, we’re anticipating further relief from May onwards.”
Despite a thumping belief the RBA will keep interest rates on hold, six of the 34 experts believe there is a case for slashing them.
One of them was Leanne Pilkington from Laing+Simmons who thinks a cut next month would be shrewd in light of recent jobs numbers.
Last week’s data from the Australian Bureau of Statistics showed the seasonally adjusted unemployment rate remained flat at 4.1 per cent.
“As well as sustained cost of living pressure and moderating inflation, the unexpected hit to employment figures has widened the window of opportunity for the RBA to cut rates, which it is expected to do in coming months anyway. It might be prudent to act now,” Pilkington said.
The survey was carried out before today’s announcement by Prime Minister Anthony Albanese an election would be held on May 3, a factor alluded to by one expert.
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“Another rate cut coming soon but not just yet—it’s not urgent, and the bank will want to keep a low profile during the election campaign,” said Geoffrey Kingston, of the Macquarie University Business School in Sydney.
Looking ahead, two in three experts surveyed forecast two or three more cuts this year.
A thumping 93 per cent also thought lenders would continue to pass on the next cut to the cash rate in full.
