The Reserve Bank of Australia (RBA) has left the official interest rates on hold at 4.75 per cent for a seventh consecutive month at its June 2011 meeting.
The central bank's decision follows surprisingly weak gross domestic product (GDP) figures, released last week, which showed the economy contracted by 1.2% in the March quarter for the first time since 2008. Most economists predicted correctly that it's unlikely the RBA would lift rates the week after the Bureau of Statistics provided such figures.
However it is only a matter of time before the central bank lifts the cash rate to head off inflationary pressures stemming from the $76 billion mining investment boom expected next financial year. Most economists have been looking towards August as the next likely date for an interest rate rise, as the next set of official inflation figures come out in late July.
In one bright point for home owners it seems major banks were unlikely to supersize their mortgage rate increases when the Reserve Bank next raised interest rates. Bank funding costs are not going up and that means they're not as pressured to continue raising rates on mortgages.
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