It’s not often something steals the show on Melbourne Cup Day, but all eyes will certainly shift from the racetrack to Reserve Bank of Australia (RBA) at 2.30pm on November 7.
According to Finder, 69 per cent of experts are predicting an interest rate rise after inflation rose 1.2 per cent in the September quarter.
In this month’s Finder Cash Rate Survey, 31 of the 45 experts quizzed said the RBA would lift the cash rate, while 31 per cent predicted a hold.
Of those tipping a hike, all predicted the rise would be 25 basis points, lifting the cash rate to 4.35 per cent.
The last time the cash rate was at a similar rate, of 4.5 per cent, was November 2011.
Graham Cooke, head of consumer research at Finder, said it was shaping up to be the rate that stops the nation for the second year in a row.
“Inflation is falling but not as quick as many had hoped, giving the RBA reason to lift the cash rate on Tuesday.
“The effects of previous hikes are only starting to take effect, so another rate rise could spell disaster for many homeowners.”
The panel’s forecast for the cash rate peak has increased slightly from an average of 4.3 per cent to 4.4 per cent – indicating a growing consensus of another cash rate increase.
“Since taking on the role of Governor of the Reserve Bank of Australia, Michele Bullock has been clear that another cash rate increase is not off the cards,” Mortgage Choice’s Anthony Waldron said.
“With the Australian Bureau of Statistics showing a 1.2 per cent rise in inflation over the September quarter and a seasonally adjusted fall in the unemployment rate, the data points to a cash rate hike in November.”
REA Group’s Cameron Kusher agreed.
“Inflation is not falling in line with RBA forecasts and after having talked tough on the RBA’s preparedness to lift rates if required, the new RBA Governor would look weak if we didn’t get a rate hike on the back of the latest numbers,” he said.
But Metropole Property Strategists’ Michael Yardney predicted a rate hold this month.
“The trend of core inflation remains down and two major factors leading to an increase in the September quarter CPI were fuel and rents, which will not be directly affected by raising rates again and will in themselves take money out of consumers’ pockets helping slow down spending,” he said.
“The RBA can wait a little longer to see how things pan out.”