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Reserve Bank of Australia - Source: ONE News -
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Australian homeowners are bracing for a possible interest rate rise on Tuesday, with a number of economists tipping the Reserve Bank of Australia (RBA) will lift the official cash rate when it meets in Sydney.
The cash rate has remained unchanged at 3% for the past five months, but commentators suggest a 25 basis points rise is on the cards.
Positive retail sales and jobs data have added to the view that
Australia has weathered the global recession better than
most.
Macquarie Group strategist Rory Robertson argues that means the
Reserve Bank will act on Tuesday.
"The good news on the Australian economy over recent months has been bad news for interest rates," he said.
"The RBA now appears set to lift its cash rate by 25 basis points to 3.25% at 2.30pm (4:30pm NZT)."
But it is not all bad news for homeowners.
The majority of economists believe a November rate rise is more likely.
And even Robertson suggests the chances of aggressive tightening are rather weak.
"Any RBA tightening cycle from today's 'emergency' 3% cash rate
to a 'neutral' 5% rate may take a couple of years and come in fits
and starts," he said.
