Key indicators point to rate cut in May


Laine Gordon

Laine Gordon

May 19, 2015( 2 min read )

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A number of key economic indicators are all pointing to a cash rate cut when the Reserve Bank of Australia board meets tomorrow, new RateCity analysis has found.

Peter Arnold, financial analyst at RateCity, said low inflation figures, falling commodity prices, as well as high Aussie dollar and high unemployment figures all pointed to a rate cut tomorrow, pushing the cash rate to a new record low of 2 percent.

“We looked at 17 economic indicators in an effort to understand what would be going on in the minds of the RBA’s board this week and found that several key indicators were pointing towards lower rates,” he said.

“But the messages are still mixed – Sydney house prices remain high, as does household debt – so it will be another tough decision for the RBA.

“Every month there’s a lot of chatter about interest rates. But we’ve found that, understandably, everyday Aussies don’t really understand what this means for them or why the RBA makes the decisions they do.

“To help people with this, we thought we’d bring it to life in the easiest way possible. We’ve stacked a range of the indicators that will be front of mind for the RBA when they meet on Tuesday and created a great visual to help everyday consumers understand some of the main elements that contribute to the decision each month,” he said.

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