Happy Christmas from the RBA!
Glenn Stevens has given his Christmas present to the nation and kept interest rates the same until 2011. What fabulous news for all home owners.
As you can see or may have already heard, the official cash rate has remained unchanged this month (4.75%) mainly due to concerns about the creditworthiness of a number of European governments.
This announcement is just what investors have been waiting for as many people believe that now is a great time to consider starting or increasing your property portfolio.
However, there is no guarantee that the financial institutions will not adjust their rates independently, so keep posted to the media over the next few days and weeks.
As always, if you have any questions or concerns about interest rates or how to invest in property we would be delighted to have a chat with you, Please call the office.
Lending institutions change their criteria all the time so it's always good to check in with us at least once a year to allow us to discuss your personal situation.
Sometimes a quick chat on the phone can help ease some unnecessary worries and put a new plan in place for you.
We hope you have a wonderful Christmas break and look forward to hearing from you soon.
Number 2010-30
Date 7 December 2010
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.
Since the previous Board meeting, concerns about the creditworthiness of a number of European governments have again become the main focus of financial markets, with a marked rise in sovereign bond spreads for some euro-area countries and an increase in volatility. At the same time, recent data suggest that the Chinese and Indian economies have continued to grow strongly and price pressures, particularly for food, have picked up in China as well as a number of other economies in Asia. Modest growth is continuing in the United States.
For Australia, the terms of trade are at their highest level since the early 1950s, and national income is growing strongly as a result. Recent information indicates that, as had been expected, private investment is beginning to pick up in response to high levels of commodity prices. In the household sector thus far, there continues to be a degree of caution in spending and borrowing, which has led to a noticeable increase in the saving rate. Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend.
Employment growth has been very strong over the past year, though some leading indicators suggest a more moderate pace of expansion in the period ahead. After the significant decline last year, growth in wages has picked up somewhat, as had been expected. Some further increase is likely over the coming year.
The exchange rate has risen significantly this year, reflecting the high level of commodity prices and the respective outlooks for monetary policy in Australia and the major countries. This will assist, at the margin, in containing pressure on inflation over the period ahead. Over the next few quarters, inflation is expected to be little changed, though it is likely to increase somewhat over the medium term if the economy grows as expected.
Following the Board's decision last month to lift the cash rate, and the subsequent increases by financial institutions, lending rates in the economy are now a little above average. The Board views this setting of monetary policy as appropriate for the economic outlook.
Wednesday, December 8, 2010
Tuesday, November 2, 2010
RBA raises rates on Melbourne Cup Day (again)
ALL BETS ARE OFF!!
“SHOCKING!!” “SO YOU THINK!!” you could have predicted this…
The RBA have announced today that they will increase the cash rate by 25 basis points to 4.75 …….
Please find following this month's press release on the RBA's interest rate announcement.
The RBA have elected to increase rates this month due to the global economy grew faster than trend.
Number 2010-26
Date 2 November 2010
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to raise the cash rate by 25 basis points to 4.75 per cent, effective 3 November 2010.
The global economy grew faster than trend over the year to mid 2010. Global growth will probably ease back to about trend pace over the coming year as strong recoveries in the emerging world give way to a more sustainable pace of expansion and growth remains subdued in the United States and Europe. At the same time, concerns about the possibility of a larger than expected slowing in Chinese growth have lessened recently and most commodity prices have firmed, after a fall earlier in the year. The prices most important to Australia remain at very high levels, with the result that the terms of trade are at their highest since the early 1950s. The turmoil in financial markets earlier in the year has abated, though sentiment remains fragile.
Information on the Australian economy indicates growth around trend over the past year. Public spending was prominent in driving aggregate demand for several quarters but this impact is now lessening. While there has been a degree of caution in private spending behaviour thus far, the rise in the terms of trade, which is now boosting national income very substantially, is likely to lead to stronger private spending over the next couple of years, especially in business investment.
Asset values are not moving notably in either direction, and overall credit growth remains quite subdued at this stage notwithstanding evidence of some greater willingness to lend. The exchange rate has risen significantly this year, reflecting the high level of commodity prices and the respective outlooks for monetary policy in Australia and the major countries. This will assist, at the margin, in containing pressure on inflation.
The demand for labour has continued to firm. While the labour market is not as tight as in 2007 and 2008, some further strengthening would appear to be in prospect, judging by the trends in job vacancies. After the significant decline last year, growth in wages has picked up somewhat, as had been expected. Some further increase is likely over the coming year.
Given these conditions, the moderation in inflation that has been under way for the past two years is probably now close to ending. Recent information suggests underlying inflation running at about 2½ per cent, with the CPI inflation rate a little higher due mainly to increases in tobacco taxes. Both results were helped somewhat in the latest quarter by unusual softness in food prices. Inflation is likely to rise over the next few years. This outlook, which is largely unchanged from the Bank's earlier forecasts, assumes some tightening in monetary policy.
For some time, the Board has held the stance of monetary policy steady, which has resulted in interest rates to borrowers being close to their average of the past decade. This allowed some time to observe the early effects of previous policy changes and to monitor the uncertain global outlook. The Board is also cognisant of differences in the degree of economic strength by industry and by region.
However, the economy is now subject to a large expansionary shock from the high terms of trade and has relatively modest amounts of spare capacity. Looking ahead, notwithstanding recent good results on inflation, the risk of inflation rising again over the medium term remains. At today's meeting, the Board concluded that the balance of risks had shifted to the point where an early, modest tightening of monetary policy was prudent.
Even though the RBA have only increased the cash rate by ................ this is by no means a guarantee that the major lenders will not adjust their rates independently over and above the RBA rise as has been hinted at over the last few weeks. So keep posted to the media over the next few days and weeks to see how the majors react to todays announcement.
If you have any questions about your current loan or if you are interested in a review of your financial situation, please give us a call, we look forward to hearing from you soon.
“SHOCKING!!” “SO YOU THINK!!” you could have predicted this…
The RBA have announced today that they will increase the cash rate by 25 basis points to 4.75 …….
Please find following this month's press release on the RBA's interest rate announcement.
The RBA have elected to increase rates this month due to the global economy grew faster than trend.
Number 2010-26
Date 2 November 2010
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to raise the cash rate by 25 basis points to 4.75 per cent, effective 3 November 2010.
The global economy grew faster than trend over the year to mid 2010. Global growth will probably ease back to about trend pace over the coming year as strong recoveries in the emerging world give way to a more sustainable pace of expansion and growth remains subdued in the United States and Europe. At the same time, concerns about the possibility of a larger than expected slowing in Chinese growth have lessened recently and most commodity prices have firmed, after a fall earlier in the year. The prices most important to Australia remain at very high levels, with the result that the terms of trade are at their highest since the early 1950s. The turmoil in financial markets earlier in the year has abated, though sentiment remains fragile.
Information on the Australian economy indicates growth around trend over the past year. Public spending was prominent in driving aggregate demand for several quarters but this impact is now lessening. While there has been a degree of caution in private spending behaviour thus far, the rise in the terms of trade, which is now boosting national income very substantially, is likely to lead to stronger private spending over the next couple of years, especially in business investment.
Asset values are not moving notably in either direction, and overall credit growth remains quite subdued at this stage notwithstanding evidence of some greater willingness to lend. The exchange rate has risen significantly this year, reflecting the high level of commodity prices and the respective outlooks for monetary policy in Australia and the major countries. This will assist, at the margin, in containing pressure on inflation.
The demand for labour has continued to firm. While the labour market is not as tight as in 2007 and 2008, some further strengthening would appear to be in prospect, judging by the trends in job vacancies. After the significant decline last year, growth in wages has picked up somewhat, as had been expected. Some further increase is likely over the coming year.
Given these conditions, the moderation in inflation that has been under way for the past two years is probably now close to ending. Recent information suggests underlying inflation running at about 2½ per cent, with the CPI inflation rate a little higher due mainly to increases in tobacco taxes. Both results were helped somewhat in the latest quarter by unusual softness in food prices. Inflation is likely to rise over the next few years. This outlook, which is largely unchanged from the Bank's earlier forecasts, assumes some tightening in monetary policy.
For some time, the Board has held the stance of monetary policy steady, which has resulted in interest rates to borrowers being close to their average of the past decade. This allowed some time to observe the early effects of previous policy changes and to monitor the uncertain global outlook. The Board is also cognisant of differences in the degree of economic strength by industry and by region.
However, the economy is now subject to a large expansionary shock from the high terms of trade and has relatively modest amounts of spare capacity. Looking ahead, notwithstanding recent good results on inflation, the risk of inflation rising again over the medium term remains. At today's meeting, the Board concluded that the balance of risks had shifted to the point where an early, modest tightening of monetary policy was prudent.
Even though the RBA have only increased the cash rate by ................ this is by no means a guarantee that the major lenders will not adjust their rates independently over and above the RBA rise as has been hinted at over the last few weeks. So keep posted to the media over the next few days and weeks to see how the majors react to todays announcement.
If you have any questions about your current loan or if you are interested in a review of your financial situation, please give us a call, we look forward to hearing from you soon.
Wednesday, October 6, 2010
First Choice Home Loans set to merge!!
This is HOT news. We are about to merge with another Mortgage Broking business....Money Advantage operated by Michelle Murchison and her loans Manager Tony Smith.
Our new business will have a new name that reflects what we do and what we are...we hope you like it.....MONEY-SMART.
As I am now a licensed Financial Planner, our new enterprise can offer a holistic financial solution to all our clients....not only can we get you the best mortgage, we can show you how to get rid of it quicker, protect yourslef and your lifestyle along the way and also create some wealth for your future.
The existing First Choice Home Loans staff are still here to help you....myself, Robyn and Sandy.
Shortly we will be writing to all of you to advise you officially and to give details of client info nights close to you. The merge is planned to happen around December 1st and I promise to keep you posted.
We hope you are as excited as we are about our new venture.
Our new business will have a new name that reflects what we do and what we are...we hope you like it.....MONEY-SMART.
As I am now a licensed Financial Planner, our new enterprise can offer a holistic financial solution to all our clients....not only can we get you the best mortgage, we can show you how to get rid of it quicker, protect yourslef and your lifestyle along the way and also create some wealth for your future.
The existing First Choice Home Loans staff are still here to help you....myself, Robyn and Sandy.
Shortly we will be writing to all of you to advise you officially and to give details of client info nights close to you. The merge is planned to happen around December 1st and I promise to keep you posted.
We hope you are as excited as we are about our new venture.
Rates on hold for now!
Hi guys....below is the RBA Governor's latest statement on interest rates.
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy grew faster than trend over the year to mid 2010, but will probably ease back to about trend pace over the coming year. Recent information is consistent with a more sustainable, but still strong, pace of growth in China and most of the Asian region. In Europe and the United States, growth prospects appear to be modest in the near term, a legacy of the financial crisis and its impact on private and public finances. Financial markets are still characterised by a degree of uncertainty, and are responding both to differences in growth outlooks between regions and evident strains on public finances and banking systems in several smaller countries in Europe. Most commodity prices have changed little over recent months, and those most important to Australia remain very high.
Information on the Australian economy shows growth around trend over the past year. Public spending was prominent in driving aggregate demand for several quarters but this impact is now lessening, while the prospects for private demand, and in particular business investment, have been improving. This is to be expected given the large rise in Australia’s terms of trade, which is now boosting national income very substantially.
Asset values are not moving notably in either direction, and overall credit growth is quite subdued at this stage, notwithstanding evidence of some greater willingness to lend. Inflation has moderated from the excessive pace of 2008. The effects of the rise in tobacco taxes aside, CPI inflation has been running at around 2¾ per cent over the past year. That looks likely to continue in the near term.
The current stance of monetary policy is delivering interest rates to borrowers close to their average of the past decade. The Board regards this as appropriate for the time being. If economic conditions evolve as the Board currently expects, it is likely that higher interest rates will be required, at some point, to ensure that inflation remains consistent with the medium-term target.
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy grew faster than trend over the year to mid 2010, but will probably ease back to about trend pace over the coming year. Recent information is consistent with a more sustainable, but still strong, pace of growth in China and most of the Asian region. In Europe and the United States, growth prospects appear to be modest in the near term, a legacy of the financial crisis and its impact on private and public finances. Financial markets are still characterised by a degree of uncertainty, and are responding both to differences in growth outlooks between regions and evident strains on public finances and banking systems in several smaller countries in Europe. Most commodity prices have changed little over recent months, and those most important to Australia remain very high.
Information on the Australian economy shows growth around trend over the past year. Public spending was prominent in driving aggregate demand for several quarters but this impact is now lessening, while the prospects for private demand, and in particular business investment, have been improving. This is to be expected given the large rise in Australia’s terms of trade, which is now boosting national income very substantially.
Asset values are not moving notably in either direction, and overall credit growth is quite subdued at this stage, notwithstanding evidence of some greater willingness to lend. Inflation has moderated from the excessive pace of 2008. The effects of the rise in tobacco taxes aside, CPI inflation has been running at around 2¾ per cent over the past year. That looks likely to continue in the near term.
The current stance of monetary policy is delivering interest rates to borrowers close to their average of the past decade. The Board regards this as appropriate for the time being. If economic conditions evolve as the Board currently expects, it is likely that higher interest rates will be required, at some point, to ensure that inflation remains consistent with the medium-term target.
Tuesday, September 7, 2010
RBA Leaves rates on hold as expected
The Reserve Bank of Australia has decided to keep the official cash rate on hold at 4.5 per cent for the fourth consecutive month.
Uncertainty surrounding the global economic outlook, consumer spending and Australia's political situation forced the Board to leave rates unchanged.
Rates have been on hold since May. Prior to that, concerns about rising inflation forced the RBA to lift rates by 25 basis points in March, April and May.
While local economic data shows the Australian economy has grown at the fastest pace in three years, ongoing economic uncertainty abroad ultimately forced the RBA to err on the side of caution when making the latest rate decision.
"The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. With growth in the near term likely to be close to trend, inflation close to target and with the global outlook remaining somewhat uncertain, the Board judged this setting of monetary policy to be appropriate for the time being," RBA governor Glenn Stevens said in his statement on monetary policy.
The news did not come as a surprise, with many economists predicting the RBA would leave rates unchanged when it met in Adelaide today.
AMP chief economist Shane Oliver said the stronger than expected data culminating in above trend growth in the June quarter was balanced against uncertainty regarding the global outlook and expectations that inflation is likely to remain within the target range over the year ahead.
Uncertainty surrounding the global economic outlook, consumer spending and Australia's political situation forced the Board to leave rates unchanged.
Rates have been on hold since May. Prior to that, concerns about rising inflation forced the RBA to lift rates by 25 basis points in March, April and May.
While local economic data shows the Australian economy has grown at the fastest pace in three years, ongoing economic uncertainty abroad ultimately forced the RBA to err on the side of caution when making the latest rate decision.
"The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. With growth in the near term likely to be close to trend, inflation close to target and with the global outlook remaining somewhat uncertain, the Board judged this setting of monetary policy to be appropriate for the time being," RBA governor Glenn Stevens said in his statement on monetary policy.
The news did not come as a surprise, with many economists predicting the RBA would leave rates unchanged when it met in Adelaide today.
AMP chief economist Shane Oliver said the stronger than expected data culminating in above trend growth in the June quarter was balanced against uncertainty regarding the global outlook and expectations that inflation is likely to remain within the target range over the year ahead.
Tuesday, August 3, 2010
RESERVE BANK LEAVES RATES ON HOLD
Surprise, surprise there is a finance God after all!
We are excited to bring you this month's press release on the RBA's interest rate announcement. What fabulous news for all home owners and investors this month.
As you can see or may have already heard, the official cash rate has remained unchanged this month mainly due to the global economy growing faster than trend over the year to mid 2010.
This announcement is just what home owners and investors have been waiting for as many people believe that now is a great time to consider starting or increasing your property portfolio.
This is by no means a guarantee that the financial institutions will not adjust their rates independently, so keep posted to the media over the next few days and weeks.
As always, if you have any questions or concerns about interest rates or how to invest in property we would be delighted to have a chat with you, Please call the office.
Lending institutions change their criteria all the time so it's always good to check in with us at least once a year to allow us to discuss your personal situation.
Sometimes a quick chat on the phone can help ease some unnecessary worries and put a new plan in place for you.
Number 2010-16
Date 3 August 2010
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy grew faster than trend over the year to mid 2010. The expansion has been uneven, with the major advanced countries recording only moderate growth overall but growth in Asia and Latin America very strong. There are indications that growth in China is moderating to a more sustainable rate as policies are now less accommodating. Similar adjustments to policies and growth rates are occurring in other countries in the Asian region. In Europe, while output in some key countries has been improving significantly, prospects for next year are more uncertain given planned fiscal contraction. US growth was stronger in the first half of 2010 but the pace of labour market improvement has been slow and the expansion may be somewhat lacklustre in the second half of 2010. Overall, the Bank expects global growth to be about trend over the coming year.
The caution evident in financial markets in the past few months has abated of late, helped by the disclosure of information about European banks. Nonetheless, the global outlook remains somewhat more uncertain than a few months ago and this is reflected in the volatility of financial prices. Commodity prices are off their peaks but those most important for Australia remain at very high levels, and the terms of trade are around their peak of two years ago.
With the high level of the terms of trade expected to add to incomes and demand, output growth in Australia over the year ahead is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing. Consumption spending is recording a modest increase at present, with households displaying a degree of caution, but most indicators suggest business investment will increase over the coming year. Business credit has stabilised, though credit conditions for some sectors remain difficult. Credit outstanding for housing has continued to expand, but the upward pressure on dwelling prices appears to have abated.
The labour market has continued to firm gradually, and after the significant decline last year, growth in wages has picked up a little, as had been expected. Recent data for inflation were consistent with the Bank’s May forecasts, with underlying inflation declining to about 2¾ per cent, the lowest rate for about three years. The rate of CPI increase was a little above 3 per cent due to the effects of increases in tobacco taxes announced earlier in the year. Through to mid 2011, underlying inflation is likely to be in the top half of the target zone, while CPI inflation will probably be just above 3 per cent for a few quarters due to the impact of the tax changes and increases in utilities prices.
The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. With growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain, the Board judged this setting of monetary policy to be appropriate.
We look forward to hearing from you soon.
We are excited to bring you this month's press release on the RBA's interest rate announcement. What fabulous news for all home owners and investors this month.
As you can see or may have already heard, the official cash rate has remained unchanged this month mainly due to the global economy growing faster than trend over the year to mid 2010.
This announcement is just what home owners and investors have been waiting for as many people believe that now is a great time to consider starting or increasing your property portfolio.
This is by no means a guarantee that the financial institutions will not adjust their rates independently, so keep posted to the media over the next few days and weeks.
As always, if you have any questions or concerns about interest rates or how to invest in property we would be delighted to have a chat with you, Please call the office.
Lending institutions change their criteria all the time so it's always good to check in with us at least once a year to allow us to discuss your personal situation.
Sometimes a quick chat on the phone can help ease some unnecessary worries and put a new plan in place for you.
Number 2010-16
Date 3 August 2010
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy grew faster than trend over the year to mid 2010. The expansion has been uneven, with the major advanced countries recording only moderate growth overall but growth in Asia and Latin America very strong. There are indications that growth in China is moderating to a more sustainable rate as policies are now less accommodating. Similar adjustments to policies and growth rates are occurring in other countries in the Asian region. In Europe, while output in some key countries has been improving significantly, prospects for next year are more uncertain given planned fiscal contraction. US growth was stronger in the first half of 2010 but the pace of labour market improvement has been slow and the expansion may be somewhat lacklustre in the second half of 2010. Overall, the Bank expects global growth to be about trend over the coming year.
The caution evident in financial markets in the past few months has abated of late, helped by the disclosure of information about European banks. Nonetheless, the global outlook remains somewhat more uncertain than a few months ago and this is reflected in the volatility of financial prices. Commodity prices are off their peaks but those most important for Australia remain at very high levels, and the terms of trade are around their peak of two years ago.
With the high level of the terms of trade expected to add to incomes and demand, output growth in Australia over the year ahead is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing. Consumption spending is recording a modest increase at present, with households displaying a degree of caution, but most indicators suggest business investment will increase over the coming year. Business credit has stabilised, though credit conditions for some sectors remain difficult. Credit outstanding for housing has continued to expand, but the upward pressure on dwelling prices appears to have abated.
The labour market has continued to firm gradually, and after the significant decline last year, growth in wages has picked up a little, as had been expected. Recent data for inflation were consistent with the Bank’s May forecasts, with underlying inflation declining to about 2¾ per cent, the lowest rate for about three years. The rate of CPI increase was a little above 3 per cent due to the effects of increases in tobacco taxes announced earlier in the year. Through to mid 2011, underlying inflation is likely to be in the top half of the target zone, while CPI inflation will probably be just above 3 per cent for a few quarters due to the impact of the tax changes and increases in utilities prices.
The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. With growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain, the Board judged this setting of monetary policy to be appropriate.
We look forward to hearing from you soon.
Tuesday, July 6, 2010
Relief Again!
We are excited to bring you this month's press release on the RBA's interest rate announcement. What fabulous news for all home owners and investors this month.
As you can see or may have already heard, the official cash rate has surprisingly remained unchanged this month.
This is by no means a guarantee that the financial institutions will not adjust their rates independently, there so keep posted to the media over the next few days and weeks.
As always, if you have any questions or concerns about interest rates or how to invest in property we would be delighted to have a chat with you, Please call the office.
Lending institutions change their criteria all the time so it's always good to check in with us at least once a year to allow us to discuss your personal situation.
Sometimes a quick chat on the phone can help ease some unnecessary worries and put a new plan in place for you.
We look forward to hearing from you soon.
Number 2010-12
Date 6 July 2010
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy has continued to expand over recent months, consistent with a trend pace of growth. The expansion remains uneven, with the major advanced countries recording only modest growth overall, but growth in Asia and Latin America, to date, very strong. There are indications that growth in China is now starting to moderate to a more sustainable rate. In Europe, while output in some key countries has been improving recently, prospects for next year are more uncertain given the budgetary constraints governments face and the pressure on euro area banks. US growth has looked stronger in the first half of 2010 but the pace of labour market improvement is slow.
Caution in financial markets has been evident in the past couple of months, driven principally by concerns about European sovereigns and banks but also by some uncertainty about the pace of future global growth. Financial prices have been more volatile and equity prices and government bond yields in major countries have declined. Some tightness in funding markets is evident, though not on the scale seen in late 2008. Commodity prices are off their peaks but those most important for Australia remain at very high levels, and the terms of trade are approaching their peak of two years ago.
With the high level of the terms of trade expected to add to incomes and demand, output growth in Australia over the year ahead is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing. Consumption spending is recording a modest increase at present, with households displaying a degree of caution, but most indicators suggest business investment will increase over the coming year. Business credit appears to have stabilised, though credit conditions for some sectors remain difficult. Credit outstanding for housing has continued to expand at a solid pace, but dwelling prices are rising more slowly than earlier in the year.
The labour market has continued to firm gradually, and after the significant decline last year, growth in wages has picked up a little, as had been expected. Underlying inflation appears likely to be in the upper half of the target zone over the next year. The rate of CPI increase is likely to be a little above 3 per cent in the near term, due to the effects of increases in tobacco taxes announced earlier in the year and significant increases in prices for utilities.
The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. Pending further information about international and local conditions for demand and prices, the Board views this setting of monetary policy as appropriate.
As you can see or may have already heard, the official cash rate has surprisingly remained unchanged this month.
This is by no means a guarantee that the financial institutions will not adjust their rates independently, there so keep posted to the media over the next few days and weeks.
As always, if you have any questions or concerns about interest rates or how to invest in property we would be delighted to have a chat with you, Please call the office.
Lending institutions change their criteria all the time so it's always good to check in with us at least once a year to allow us to discuss your personal situation.
Sometimes a quick chat on the phone can help ease some unnecessary worries and put a new plan in place for you.
We look forward to hearing from you soon.
Number 2010-12
Date 6 July 2010
Embargo For Immediate Release
Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 4.5 per cent.
The global economy has continued to expand over recent months, consistent with a trend pace of growth. The expansion remains uneven, with the major advanced countries recording only modest growth overall, but growth in Asia and Latin America, to date, very strong. There are indications that growth in China is now starting to moderate to a more sustainable rate. In Europe, while output in some key countries has been improving recently, prospects for next year are more uncertain given the budgetary constraints governments face and the pressure on euro area banks. US growth has looked stronger in the first half of 2010 but the pace of labour market improvement is slow.
Caution in financial markets has been evident in the past couple of months, driven principally by concerns about European sovereigns and banks but also by some uncertainty about the pace of future global growth. Financial prices have been more volatile and equity prices and government bond yields in major countries have declined. Some tightness in funding markets is evident, though not on the scale seen in late 2008. Commodity prices are off their peaks but those most important for Australia remain at very high levels, and the terms of trade are approaching their peak of two years ago.
With the high level of the terms of trade expected to add to incomes and demand, output growth in Australia over the year ahead is likely to be about trend, even though the effects of earlier expansionary policy measures will be diminishing. Consumption spending is recording a modest increase at present, with households displaying a degree of caution, but most indicators suggest business investment will increase over the coming year. Business credit appears to have stabilised, though credit conditions for some sectors remain difficult. Credit outstanding for housing has continued to expand at a solid pace, but dwelling prices are rising more slowly than earlier in the year.
The labour market has continued to firm gradually, and after the significant decline last year, growth in wages has picked up a little, as had been expected. Underlying inflation appears likely to be in the upper half of the target zone over the next year. The rate of CPI increase is likely to be a little above 3 per cent in the near term, due to the effects of increases in tobacco taxes announced earlier in the year and significant increases in prices for utilities.
The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. Pending further information about international and local conditions for demand and prices, the Board views this setting of monetary policy as appropriate.
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