Cash rate expected to hold until 2015

WHILE Australia’s biggest Reserve Bank Survey shows no change expected to the cash rate on Tuesday, borrowers can expect rates to rise next year followed by a downward cycle as soon as 2017, according to one of Australia’s biggest comparison websites

All 33 leading experts and economists in the Reserve Bank Survey – including from the major four banks – are betting the Reserve Bank will keep the cash rate at 2.50 percent on Melbourne Cup day (Tuesday November 4, 214).

The most common reasons for a hold on Tuesday were regarding the economy not strong enough to warrant a rise, high unemployment and the Australian Dollar, global uncertainties particularly in the Middle East and Europe, inflation is on target and pressure on house prices.


For the past 20 years, the Reserve Bank has moved the cash rate nine times on Melbourne Cup day, six of which were in the past decade.

The vast majority of experts (91 percent or 30 out of 33) is expecting the cash rate to start rising next year, with two experts forecasting rates to rise in 2016.

Out of the 32 who expect the cash rate to rise, they predicted it’s likely to be in August 2015 – the average of these predictions.