Andrew from Vista Financial Posted April 25, 2014 Share Posted April 25, 2014 BT Financial Group Chief Economist Chris Caton predicts official interest rates will end the year at 3.0%, an increase of 0.5% on today’s rate. This would be first rate rise for more than three years. Official interest rates have now been below 5% since December 2008 and less than 4% for most of the past two years, as you can see from the table below. A rise in official interest rates is generally bad news for borrowers. A 0.5% rise in official interest rates usually translates to a 0.5% increase in variable mortgage rates, which would bring them to an average of about 5.6%1. If Mr Caton’s prediction is correct, fixed rates are also likely to start to increase by the middle of the year. Again bad news for borrowers but good news for long-suffering cash and term deposit investors. The average interest rate for a $10,000 investment in a 12-month term deposit is currently 3.4%2, well down on the 6.15% average being offered three years ago. [TABLE=width: 230] [TR] [TD=width: 105] Date[/TD] [TD=width: 71]Interest rate[/TD] [/TR] [TR] [TD=width: 105] March 2012[/TD] [TD=width: 71] 4.25%[/TD] [/TR] [TR] [TD=width: 105] June 2012[/TD] [TD=width: 71] 3.5%[/TD] [/TR] [TR] [TD=width: 105] September 2012[/TD] [TD=width: 71] 3.5%[/TD] [/TR] [TR] [TD=width: 105] December 2012[/TD] [TD=width: 71] 3.0%[/TD] [/TR] [TR] [TD=width: 105] March 2013[/TD] [TD=width: 71] 3.0%[/TD] [/TR] [TR] [TD=width: 105] June 2013[/TD] [TD=width: 71] 2.75%[/TD] [/TR] [TR] [TD=width: 105] September 2013[/TD] [TD=width: 71] 2.5%[/TD] [/TR] [TR] [TD=width: 105] December 2013[/TD] [TD=width: 71] 2.5%[/TD] [/TR] [/TABLE] Source: Reserve Bank of Australia (RBA) http://insights.bt.com.au/interest-rates-on-the-way-up/ Link to comment Share on other sites More sharing options...
Parley Posted April 25, 2014 Share Posted April 25, 2014 Did he predict that before the recent inflation figures came out. In my opinion rates are on hold for the rest of the year. Link to comment Share on other sites More sharing options...
VERYSTORMY Posted April 25, 2014 Share Posted April 25, 2014 If anything by end of year i can see rates coming down. The economy is slowing fast - look at the figures for job vacancies that came out last week. They were nightmares - engineering vacancies down 47%. WA - the cash cow for much of Oz is starting to some major problems. Link to comment Share on other sites More sharing options...
Parley Posted April 25, 2014 Share Posted April 25, 2014 There is also a view that the budget on 13th May may also hit the economy, so that would also point to stable or lower rates. I think they will stay the same. Link to comment Share on other sites More sharing options...
newjez Posted April 25, 2014 Share Posted April 25, 2014 If anything by end of year i can see rates coming down. The economy is slowing fast - look at the figures for job vacancies that came out last week. They were nightmares - engineering vacancies down 47%. WA - the cash cow for much of Oz is starting to some major problems. VS, I have heard the argument that the economy hasn't seen the effect of the mining construction phase slowing yet, and this will become more apparent over the next three years. What are your feelings on this? Link to comment Share on other sites More sharing options...
rommelverain Posted July 28, 2015 Share Posted July 28, 2015 hopefully it will lessen more. but it looks like that the economy is beginning to go down. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.