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Interest Rate Update – October 2016

No change

The Reserve Bank of Australia (RBA) has just announced it will maintain the official cash rate at 1.50%.

The price of oil rose to almost $US50 a barrel last week, following a decision by the Organisation of the Petroleum Countries (OPEC) to cut production for the first time in eight years.

This, together with some recent solid economic results, has influenced the RBA to hold off any changes to the cash rate in the short term.

The next key financial data will be the release of the quarterly inflation figures on 26th October – a very good guide for the RBA to use to decide if to further reduce the cash rate in November.

For more information, or if you would like a free review of your residential, commercial or SMSF loans against other competitive products in the market please contact Peter, David or Simon via this email, our phone: (03) 9882 2500, or visit http://www.firstpointgroup.com.au

Interest Rate Update – August 2016

Cash Rate – Reduced to 1.5%

The Reserve Bank of Australia (RBA) has just announced it will reduce the official cash rate to 1.5%.

In a finely balanced decision the RBA would have been particularly influenced by the results of the June quarter inflation rising only 0.4% and hence only 1.0% over the twelve months to the June quarter 2016. This compares with a rise of 1.3% over the twelve months to the March quarter 2016.

With inflation running well below the RBA target band of 2.0%-3.0% and the labour market having lost momentum over recent months the RBA felt it was time to move rates down again.

The RBA will update its forecast outlook in the Statement of Monetary Policy on Friday 5th August which will provide some reasoning behind their “cut” decision and paint a picture of the near future.

As we see interest rates continue to fall, the next 12 months will be very interesting times. Despite three cash rate cuts of 25 basis points each since March 2015 there has been little benefit to the economy and other macro tools are likely required to refire the economy. Two things are for sure:

Interest rates are historically low so borrowing is very cost effective

There is not much left for the RBA to play with…

For more information, or if you would like a free review of your residential, commercial or SMSF loans against other competitive products in the market please contact Peter, David or Simon via this email, our phone: (03) 9882 2500, or visit http://www.firstpointgroup.com.au/

Interest Rate Update – July 2016

Cash Rate – No Change

The Reserve Bank of Australia (RBA) has just announced it will maintain the official cash rate at 1.75%.

Notwithstanding the uncertainty surrounding both the Australian election outcome and the aftermath of Brexit the RBA has a preference to await the results of the June quarter inflation figures (due later this month) before considering its next move. The majority of Economists are currently predicting the RBA’s next move to be a reduction to the Cash Rate in August.

Interest Rate Update – June 2016

Cash Rate – No Change

The Reserve Bank of Australia (RBA) has just announced it will maintain the official cash rate at 1.75%.

This follows last week’s better than expected GDP figures which showed annualised economic growth at 3.1 per cent.

It is interesting to note that business lending has been growing at a slightly higher rate than housing lending, the first time this has occurred since early 2009. The reasons for this have been the current low interest rate environment, an improvement in overall business confidence together with the influence from the regulatory body, APRA, as they continue to push the Lenders to reduce their growth in mortgage investment lending.

We see no change to the Cash Rate in the short term, although many Economists are expecting another reduction before the end of the year.

Interest Rate Update – May 2016

Cash Rate – Reduced to 0.25%

The Reserve Bank of Australia (RBA) has just announced it will reduce the official cash rate to 1.75%.

The weakness of the March quarter’s inflation figure (-0.2%) shocked many Economists. This was the first time the headline inflation rate has fallen since December 2008 and the resultant annual inflation of 1.3% is the lowest since June 2012. Fuel and fruit prices were the main influences however slower price rises in the regulated sectors such as utilities, health insurance and rates together with low wage growth have contributed.

Low interest rates have been supporting demand and hopefully a lower exchange rate as a result of this reduction will further assist the economy.