the adviser logo

Rate cut on cards: NAB

by Staff Reporter8 minute read
The Adviser

Steven Cross

Soft labour numbers released by the Australian Bureau of Statistics will put more pressure on the Reserve Bank to cut the cash rate.

According to ABS data, Australia shed 27,000 jobs in June, lifting the unemployment rate by 0.1 per cent to 5.1 per cent.

Speaking with The Adviser, NAB economist Alexandra Knight said the slight increase in unemployment is building the case for more interest rate cuts.

“In itself, it’s not enough to make the RBA move, but we are expecting a rate cut in September, and this just adds to the case for the lowering of the cash rate,” Ms Knight said.

While the soft labour market will be a factor in the RBA’s September rate decision, Ms Knight said the next set of CPI results, released at the end of this month, will ultimately provide the RBA with the information they need to make a decision.

 “We’re more looking towards the June quarter CPI results out later this month, so if that comes in soft that might help them build confidence to cut. We’re forecasting a 25 basis point cut in September,” she said.

“The RBA is comfortable with rates at the moment and we believe they are taking a wait and see approach to see if there is more softness in the economy.”

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more