NAB Predicts - No Rates Chages Till Next Year

According to the National Australia Bank interest rates are likely to remain on hold until next year, which would mean that rates have been unchanged for the longest period in twenty years.

Interest rates have already been on hold for the last 10 months at 4.75% and the NAB is predicting an increase of 25 basis points when the Reserve Bank finally lifts rates sometime next year.

Inflation is under the target

The NAB are also predicting that core inflation will remain between 2.5 per cent and 2.75 per cent which is in the Reserve Bank's target range of 2 to 3 per cent until 2013.

After revising the June inflation figures the ABS adjusted them to 0.6 per cent down from 0.9 per cent placing inflation comfortably within the target range.

Alan Oster NAB's chief economist stated that it was unclear how the RBA would react to the adjusted inflation figure, but felt that the RBA would leave interest rates on hold.

The NAB has also predicted that the RBA will only increase rates up to 5 per cent in around November 2012.

Mr Oster further suggested that the RBA would only lower rates if unemployment were to rise from 5.3 per cent to above 5.5 per cent due to the global economic situation worsening.

Westpac on the other hand are the only major bank tipping an interest cut of 25 basis points around December.

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Published on September 9-th, 2011 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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