We've spent the year expecting interest rates to go up, now there's hope they may be coming down. It's an unusual reversal of fortune and one that took many economists by surprise when just a few months ago the Reserve Bank was widely tipped to lift rates at least twice before Christmas.
While there is much disagreement about when the rate cut will happen and by how much, the majority agree the Reserve will at least keep rates on hold until the new year.
In a recent survey of 20 economists by the Australian Financial Review, the most popular prediction for the next six months is that the Reserve Bank will leave rates untouched (9 out of 20). Five said they expect rates to be cut by the end of the year, while five tip rates to rise over the next six months.
The Reserve Bank's next move is anyone's guess, but the progression of Europe's debt crisis and America's economic slowdown may have a part to play. In the meantime a number of lenders are cutting their fixed mortgage rates, so if you are considering taking advantage of the lower rates on offer, call us and we would be happy to talk you through the process.