Record low interest rate rolls into its second year

10 August, 2018, 11:15 | Author: Eric Barnett
  • An Australia 100 dollar note is seen in this illustration

THE Reserve Bank has kept the official cash rate on hold for two years running at its August meeting, extending the longest ever streak without a change. The GDP for 2018 and 2019 is expected to average slightly above 3 per cent. Household income has been growing slowly and debt levels are high. "This should see some further reduction in spare capacity".

How positive can the data - that only ever describes the past - actually become to be able to cover up the [larger] risks the United Kingdom economy is facing?'AUD Benefits from Central Bank Speculation and Risk-Sentiment Investors have found risky commodity-correlated currencies like the Australian Dollar more appealing since the end of last week, due to rising commodity prices and stronger market performance in China.

The bank will have more on its forecasts in Friday's third Statement of Monetary policy for 2018 but the statement yesterday indicates that apart from inflation there won't be too much of a change.

In the wake of today's mixed RBA meeting, Mr Lowe is likely to offer a cautious economic outlook, which would drag the Australian Dollar further down. Keep in mind that this was the first month in which the USA imposed tariffs on China imports.

A statement accompanying the decision from Philip Lowe, the central bank's governor, gave a nod to uncertainty over USA trade policy as well as household consumption domestically, in addition to noting the toll taken on Australia's farm sector by a recent drought.

"Not surprisingly, the direction of global trade policy continues to be a key source of uncertainty, but importantly, "financial conditions remain expansionary, although they are gradually becoming less so in some countries".

That was an improvement on the previous call of 5.25 percent, but still a glacial decline from the current 5.4 percent.

The latest inflation data were in line with the Bank's expectations.

The RBA said Tuesday "the central forecast is for inflation to be higher in 2019 and 2020 than it is currently" but gave no other details.

With a population growth pace of 1.6 per cent, which is more than double the 0.7 per cent average for advanced economies, Australia has avoided a recession for a record 27 years.

The slowdown in the home market, particularly in Sydney and Melbourne, has reportedly influenced the RBA's reluctance to raise rates.

Australia's most powerful banker has credited high immigration with boosting the economy. This was a deeper drop than the expected minus 0.5% decline and the 2.4% gain in May.

"The low level of interest rates is continuing to support the Australian economy", Dr Lowe said in the final paragraph of the statement." urther progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual".

Dr Lowe said the RBA needed "to keep a close eye on the housing market and housing finance" but added it was helpful the change was taking place at a time when the unemployment rate is trending lower and the economy is recording good growth.

Lowe told the audience the Bank expects Australian inflation to remain low over coming years, with the consumer price index set to rise only as far as 2.5% "in 2020", which is the midpoint of the RBA's 2% to 3% inflation target.



Jose Mourinho Tells Officials That He Wants This Frenchman SOLD
They certainly seem very unsure of the players he has brought in before - [Eric] Bailly, [Victor] Lindelof. In the campaign prior to that, United made complete mincemeat of their opponents by beating them 4-1.

Courtney Smith's lawyer: My client has never been contacted by Ohio State
Smith, who was also Ohio State's recruiting coordinator, was sacked on July 23, just days after reports surfaced that an order of protection had been filed against him by Courtney Smith .

Indonesia natural disaster : Third strong quake hits tourist island of Lombok
Another natural disaster has struck the Indonesian island of Lombok as the community battles to recover from Sunday's quake. Many farmers were reluctant to move far from their damaged homes and leave precious livestock behind, he added.

Ian Wright: Why Liverpool FC can beat Man City to title
Across the city at United, grumbly Jose Mourinho seems to have a huge battle on his hands to raise a smile, let alone a challenge. The way in which United are being talked about this pre-season, it's as if they've got a load of bums playing for them.

"We can't afford Milinkovic-Savic" admits Milan boss Leonardo
In order to do so, the Red Devils will have to smash their transfer record, with Lazio demanding €155 million for their prized asset.

Jurgen Klopp not ruling out Deadline Day business for Liverpool
Klopp has not ruled out captain Jordan Henderson featuring on Sunday despite only returning to training at the weekend. Liverpool come into the season full of confidence, backed by the big spend of Jurgen Klopp throughout the window.

God of War’s New Game Plus due to arrive on August 20
After that, the feature will be available once players have then patched the game with the New Game Plus update as well. Test your skills against higher level enemies; some of which might even have a few new tricks up their sleeves.

The Perseid meteor shower is going to be wonderful this weekend
Although, stargazers in mid-northern latitudes will be privy to the best views, according to NASA , anyone can see the light show. We've rounded up everything you need to know about the Perseids meteor shower, including how and where to watch them.

PGA's servers reportedly hacked in Bitcoin extortion attempt
In the meantime, the PGA and IT experts are addressing the problem, but have yet to regain control of the files. The hackers also warned that any attempt to break the encryption would result in the destruction of the files.

Critics of Israel's Nation-State Law Misunderstand the Country's Constitutional System
Prime Minister Benjamin Netanyahu has been trying to placate the Druze with a package of benefits, but efforts to negotiate it have stalled.