The majority of brokers believe the RBA will keep rates on hold until at least April 2011.
According to The Adviser’s latest straw poll, 54.7 per cent of brokers believe the first rate hike for the year will happen in the second quarter.
Of the 380 respondents, 19.5 per cent think rates will go up in March or earlier, while the rest believe the next rate rise could happen in the third or fourth quarter of the year.
HSBC chief economist Paul Bloxham said brokers were right on the money, with all economic indicators pointing towards a second quarter rate rise.
While Mr Bloxham said the recent flood disaster in Queensland, Northern NSW and Victoria had forced the company to revise its headline inflation forecasts for the year ahead, HSBC still expects the next rate rise by the Reserve Bank to happen in Q2.
“We expect the first rate hike to take place in April. From there, we believe the official cash rate will climb 75 basis points to sit at 5.75 per cent by Q1 2012,” he said.
Mr Bloxham’s comments were largely echoed by AMP’s chief economist Shane Oliver.
Speaking to The Adviser, Mr Oliver said the need to move aggressively on rates had now passed. As such, he expects the Board to stay on hold until April.
“The RBA’s November rate decision turned out to be a little harsher than the Board bargained for, which leads me to believe they will keep them on hold for some time.”
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