Interest Rate Outlook
At the November board meeting, the Reserve Bank of Australia (RBA) announced the official cash rate would remain at 1.50% for the 15th consecutive month.
In his statement the Governor noted that while there are positive signs within the global and domestic economy and the labour market continues to tighten, inflation remains low. Business conditions are positive and capacity utilisation has increased.
The outlook for non-mining business investment has improved, with the forward-looking indicators being more positive than they have been for some time. Increased public infrastructure investment is also supporting the economy.
One continuing source of uncertainty is the outlook for household consumption. Household incomes are growing slowly and debt levels are high.
The Australian dollar has appreciated since mid-year, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to continued subdued price pressures in the economy.
The RBA has flagged concern around growth on housing debt having outpaced the slow growth in household income over recent times. This situation means that an interest rate rise would have a significant impact on borrowers and flow through to household spending and the economy more generally.
The housing market has eased in Sydney and growth has slowed in other capital cities because of regulatory change imposed on banks by APRA. While the Melbourne market continues to grow the pipeline of units in the short to medium term will have an impact.
Very few economists now predict imminent rate rises: just six of Finder’s 30-strong economists and experts panel expect a rise in the next six months.
Real-Time Payments
Due to launch early in 2018, the New Payments Platform (NPP) will be an open access infrastructure for fast payments in Australia. The NPP is being developed via industry collaboration to enable households, businesses and government agencies to make simply addressed payments, with near real-time funds availability to the recipient, on a 24/7 basis.
What does this mean? The new platform is due to go live around Australia Day 2018 which will mean we won’t have to wait for payments between banks to be processed overnight. It will also allow us to arrange payments using a “PayID,” such as a mobile phone number, instead of an account number or BSB. We will also be able to include 280 characters of text with a payment, up from 18 now.
Get in touch with Carrick Aland on 07 4669 9800 to arrange an introduction to Ryan Baddock and RB Finance today.
The information contained in this article is of a general nature and does not take into account your personal needs and requirements.
