Interest Rate Update – June 2016

Cash Rate – No Change

The Reserve Bank of Australia (RBA) has just announced it will maintain the official cash rate at 1.75%.

This follows last week’s better than expected GDP figures which showed annualised economic growth at 3.1 per cent.

It is interesting to note that business lending has been growing at a slightly higher rate than housing lending, the first time this has occurred since early 2009. The reasons for this have been the current low interest rate environment, an improvement in overall business confidence together with the influence from the regulatory body, APRA, as they continue to push the Lenders to reduce their growth in mortgage investment lending.

We see no change to the Cash Rate in the short term, although many Economists are expecting another reduction before the end of the year.