The RBA has decided to keep the cash rate on hold at 2.5 per cent, continuing its “period of stability”.
AMP Capital’s chief economist Shane Oliver said the outlook for the economy has not changed significantly since the August board meeting, with the exception of a spike in unemployment.
“So no need to cut and no need to tighten,” Mr Oliver said.
“Next rate will be up but probably not to mid-2015 by which time the [US Federal Reserve] will likely have started to raise rates and the Australian economy should be on a firmer footing,” he said.
But Commonwealth Bank chief economist Michael Blythe said the case for a rate rise is building.
“We expect the start of a modest tightening cycle from February 2015 that ultimately takes the cash rate to our estimate of ‘neutral’ policy of 3.5 per cent,” Mr Blythe said.
