Published : 2 September 2015
Despite what the pundits say, Australians still expect the Reserve Bank of Australia (RBA) to again reduce official interest rates from their current record lows before the end of the year, a national consumer survey has found.
The poll by leading financial advisory and investment group Cigna Wealth which asked ‘Do you think the RBA will cut the cash rate again in 2015 and to what level?’ found 60 per cent of respondents anticipate a reduction from the current record low of 2.0 per cent.
Cigna Wealth Managing Director Kent Leicester said 44 per cent of the 907 online respondents expect the cash rate to be lowered to 1.75 per cent, while 16 per cent thought it could drop to 1.5 per cent.
“We had 40 per cent of those surveyed expect no change from the RBA for the rest of the year while no one expects rates to be increased.”
Mr Leicester said with ongoing concern about the global impact of the Greek debt crisis and economic uncertainty gripping Australia’s largest trading partner China, it is reassuring the RBA still has more room to move than most other central banks around the world.
“The RBA has been reducing the cash rate since November 2011 and has cut the official rate twice this year in response to subdued consumer confidence and fragile economic conditions,” he said.
“Consumers expect the cuts to continue with worrying international economic developments and weak conditions on the domestic front.”
Mr Leicester said Cigna Wealth’s advice to home loan customers is to take advantage of the low interest rate regime and pay down mortgages as much as possible.
“Any extra payments can significantly reduce the interest you pay and decrease debt so you can become mortgage free sooner rather than later,” he said.
“This current period of record low interest rates is a win-win situation for mortgage holders with the capacity to pay back that little bit extra.”