THE WORD - What will the official cash rate be at the end of 2013?

RATES WILL SIT AT 3PC -- ROBERT MELLOR BIS Shrapnel

“The Reserve Bank will cut the official cash rate to three per cent and leave it there for some time. I believe the cash rate will continue to hover around three per cent for at least 12 months. In 2014, the RBA will look to lift the cash rate again and I think we will eventually hit 4.25 per cent by June 2015. There is no need to drop the cash rate any lower than three per cent, because, as we have seen, the latest cash rate reductions have only resulted in home owners paying more off on their mortgage, rather than more potential homebuyers coming into the market.”

RATES WILL FALL BELOW 3PC -- MARK DE MARTINO Loan Market Group

“Rates will come to rest just below three per cent – probably 2.75 per cent. Once they hit 2.75 per cent, the Reserve Bank will take a ‘wait and see’ approach to see what impact the rate cuts to date have on consumer confidence and the property market. That being said, I don’t think the Reserve Bank will cut rates because they need to, but rather because the mainstream media has forced their hand. The mainstream media is so quick to tell everyone that the sky is falling, but the reality is somewhat different.”

CASH RATE TO HIT 3PC -- TIM BROWN Vow Financial

“I think we will see another rate cut, taking the cash rate to three per cent. Once that happens, I think the Reserve Bank will be keen to take a ‘wait and see’ approach to the cash rate. A lot will then depend on the world economy, especially China. If China starts to kick again, then the Reserve Bank will hang back. I truly believe three per cent is probably as low as they will go. Unless the world economy slips into another recession, which I can’t see happening any time soon, I think we will see the cash rate settle. We are starting to see an increase in activity”

NO HIGHER THAN 4PC -- MOSHE MOSES Niche Lending

“I truly believe that the Australian cash rate come the end of 2013 will be at a level no higher than four per cent, but possibly sitting around 3.5 per cent. Inflation will play a big part in this – as seen in late October when the RBA announced there was a rise in inflation of two per cent, and immediately there was speculation that the expected 25 basis point cut in the official cash rate in November may not happen.”

ECONOMY IS CONTRACTING -- RICHARD PUSEY Switch Now Home Loans

“I believe that the cash rate will be 2.75 per cent by the end of 2013, depending on what happens around the globe. It appears that China is slowing and there is heightened global volatility in general. The economy is definitely contracting as there are many job cuts and you can see many ‘for lease’ and ‘for sale’ boards going up on what is generally prime retail space. I have also come across some people who are struggling, which I have not yet seen in my nine years in the industry.”