They say an interest rate cut is not a matter of ‘if’, only of when. Not today, as the Reserve Bank of Australia decided to keep interest rates on hold yet again. The official cash rate stands at 1.5%pa – still a record low. A rate cut is predicted for June, but we shall have to wait and see.
With an election looming and still no movement in rates, how is the Australian economy faring? ANZ Banking Chief Shane Elliott said the economy was still in ‘good shape’ overall. Unemployment is at a decent 5% and the low Aussie dollar is helping Australian exports.
Cutting Interest Rates to Boost Spending
However, an interest rate cut should stimulate consumer and company spending. But for now, the RBA is focusing on boosting growth and inflation. In fact, Australia now sits at 0% inflation. While too much inflation is a bad thing, some inflation is good.
Another way to stimulate the economy is some form of government stimulus – and with an election two weeks away, who knows what may happen?
In the meantime, as we near winter, it’s a good time to look at your own back yard – literally. Most people stay close to home in the cold, so why not take on small renovation projects over the next few months. Improving your main asset will not only benefit you financially, but make your home more comfortable in the long run.
If you have any questions about your mortgage, interest rates or are thinking of making a move, please remember we’re here to help. Call us anytime to arrange a mortgage health check.