Flat CPI leads to thoughts of imminent RBA cash rate cut ...
According to the latest data from the ABS, the CPI reported no movement (ie 0.0%) in Q3 2019 – which followed on from a 0.5% rise the previous quarter.
This stagnant growth has fuelled talk of an imminent cut to the official cash rate by the RBA – with some analysts suggesting it could come as early as next week (May's announcement). Meanwhile, several lenders including the major banks have announced cuts to their fixed rate home loans of up to 40 basis points. Despite some concern over a second boom in the housing market if the official cash rate was to be cut, analysts doubt that the RBA is really concerned about that while the inflation rate is so low – it's felt the risk of over-stimulating the economy just isn't there.
The RBA's next monetary policy board meeting will be held on Tuesday 7 May.
To discuss your current lending arrangements, contact Andrew Forsyth by phone on 3391 7566 or email at andrewf@perrierryan.com.au.
