Powered by MOMENTUM MEDIA
accountants daily logo

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

RBA makes 1st cash rate call for 2022

Business

The Reserve Bank of Australia has announced its decision on the official cash rate for this month amid speculation that a rate rise may happen sooner than expected.

Sponsored by Miranda Brownlee2 minute read

This month, the RBA has decided to maintain the official cash rate at the record-low 0.1 per cent.

Advertisement
Advertisement

Thirty-four of the 35 economists and commentators on comparison site Finder predicted that rates would remain on hold. 

AMP Capital chief economist Shane Oliver predicts the RBA will increase rates later this year. 

“The economy is running stronger than expected, unemployment is likely to push below 4 per cent and this will drive an acceleration in wages growth to a 3 per cent greater pace in the second half – meeting the conditions for an RBA rate hike later this year,” Mr Oliver explained.

“The set back to growth from the Omicron wave is looking modest with new cases already slowing.”

Bendigo Bank head of economic and market research David Robertson also expects the RBA will lift rates this year.

“Strong employment data and demand for labour bodes well for wages growth in 2022, which should also drive core inflation higher,” said Mr Robertson.

“The RBA are still likely to increase rates later in the year, although August is now in view rather than November, assuming the Omicron wave subsides by the end of summer, helping tourism, hospitality and the services sector.”

BIS Oxford Economics principal economist Sean Langcake said there is less spare capacity in the labour market entering 2022 than the RBA had previously expected.

“Moreover, underlying inflation pressures are stronger, boosted by housing construction costs. Taken together, their rate hike cycle will be brought forward compared to their earlier guidance,” he said. 

RBA makes 1st cash rate call for 2022
image intro
accountantsdaily logo

Miranda Brownlee

Miranda Brownlee

AUTHOR

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on:miranda.brownlee@momentummedia.com.au

accountants daily logo Newsletter

Receive breaking news directly to your inbox each day.

SUBSCRIBE NOW