Australia's cash rate is expected to change as early as today but, according to this month’s Finder RBA (Reserve Bank of Australia) survey, 84% of experts surveyed by comparison site Finder agree the rate will move by August.
The official cash rate has remained at an historic low of 0.10%.
Thirty-two experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
Sarah Megginson, senior editor of money at Finder, said this was the first significant next-month rate hike prediction in seven years of running the RBA Cash Rate Survey at comparison site Finder.
“With the vast majority of panellists expecting a rate move within the next two months, homeowners can be sure their mortgages are about to get more expensive.
“It must be noted however that this survey was conducted over the last week. Interestingly, six of the seven predictions for a May cash rate increase were submitted after Wednesday’s inflation results.
“Additionally, three of the big four banks have said they expect a rate rise on Tuesday [today],” Megginson said.
Stephen Koukoulas of Market Economics predicted a rate rise in May before last Wednesday’s inflation results were announced.
Shane Oliver of AMP believes a rate hike is coming today.
“Inflation has blown out to above 5%, full employment has been reached and it’s now only a matter of time before official wages data picks up,” Oliver said.
However some experts, including Noel Whittaker of QUT, cited the federal election as a reason the RBA may delay a rate rise.
“We all know rate increases are coming but I don't think they will do it just before the election,” Whittaker said.
Experts unanimously agreed a rate hike is necessary to curb inflation.
The RBA sets the official cash rate. This affects interest rates on home loans, savings accounts and other financial products. Rate cuts or increases have a big effect on borrowing costs and the Australian economy. RBA’s board meets every month (except January) to decide the future of the cash rate.
Finder surveys over 40 economists and property experts every month to forecast the RBA's next cash rate decision.