Home loan interest rates on hold

I suspect home loan interest rates will not go up until at least April 2011. The minutes of the latest Reserve Bank Board meeting are expected to reinforce the message that interest rates will remain on hold for several months.

I remain of the view that the RBA won’t start to tighten monetary policy until April next year at the earliest. I believe the RBA is no longer under pressure to lift rates.

Inflation is presently under control and other data suggests the Australian economy is not improving too fast.

While dwelling starts fell sharply in the September quarter reflecting the earlier fall in building approvals and skilled vacancies fell in December, consumer sentiment edged up slightly and remains well above long term average levels, and new vehicle sales rose slightly in November.

The NAB business survey showed that business confidence fell in November reflecting last month’s rate hike, business conditions actually improved slightly and both remain at levels consistent with reasonable economic growth.


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