Expectations of a rate cut have been steadily building with the market pricing in a 52 per cent chance of a 25 basis point cut in the August board meeting.
Westpac chief economist Bill Evans, was the first of the big four’s top forecasters to call for the Reserve Bank to cut interest rates this cycle,– one in August and one in November.
UBS also sees 50 basis points worth of rate cuts in the next year starting with a cut in the fourth quarter.
However the ANU Shadow RBA board has called for the cash rate to remain on hold, because Australia’s economy was not currently showing any clear direction.
Chair of the RBA Shadow Board Dr Timo Henckel said while real wages growth had ticked up marginally, consumer and business indicators paint a mixed picture, and the housing market has extended its slump.
“The Board is 62 per cent confident that keeping interest rates on hold is the appropriate policy, up six percentage points from February,” Dr Henckel said.
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