Interest rate pause still months away, economists warn

March 13, 2023 11:25 AM AEDT | By AAPNEWS
 Interest rate pause still months away, economists warn
Image source: AAPNEWS

Leading economists have predicted successive interest rate rises on the cards for coming months, despite a softening of language from the Reserve Bank's governor.

The Reserve Bank lifted the official cash rate to 3.6 per cent last week, the 10th month in a row interest rates have risen.

While the bank's governor Philip Lowe indicated a pause on interest rates was possible, Westpac's chief economist Bill Evans said it was unlikely it would take place.

Mr Evans said a further two rate hikes were on the cards in both April and May.

He indicated upcoming unemployment and inflation figures would be too uncertain to predict to say for sure an interest rate pause was likely.

"There is ample evidence that the governor favours a pause in April but the task is reliant on a series of volatile data reports and overseas developments," Mr Evans said.

"The employment and monthly inflation indicators are both volatile particularly in the first two months of the year due to changing seasonal patterns."

Dr Lowe said a pause on rates would occur if collective data suggested it was the right thing to do.

Economists are predicting a recovery in jobs figures during February, following the unexpected loss of 11,500 jobs from the market in January.

Commonwealth Bank economists expect to see 45,000 jobs added to the economy when the data is released on Thursday with the jobless rate holding firm at 3.70 per cent and the participation rate lifting a touch from 66.5 per cent to 66.6 per cent. 

Economists from JP Morgan said the jobs data would take on extra significance given the looming interest rates decision.

"We forecast the jobless rate to tick marginally lower to 3.6 per cent, an improvement from the prior month but still two-tenths above the 2022 low," the forecast said.

"We expect another 25 basis point hike next month, though there remains a risk that this is held back to May, after the CPI report."

The Australian Bureau of Statistics will also release its monthly business turnover and household spending indicator on Tuesday.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.