Rates stay stable at 0.25% as economic recovery remains uncertain
In today’s announcement, the RBA decided to keep the official cash rate at 0.25% as economic experiences it’s biggest contraction since the 1930s.
In a world of uncertainty, the RBA has made it very clear that the cash rate won’t be rising until we are close to full employment and inflation reaches its target of between 2-3%. Seeing as the economy has shed 800,000 jobs since March 2020, the days where the Reserve Bank looks to raise the official rate are a long way off.
Governor Philip Lowe said today that despite all the bad news, there are signs of gradual improvement. As restrictions have eased in most of the country, with the sad exception being Victoria, there has been an increase in consumer spending. Many businesses are still adapting to new operating models and a new business environment including many workers continuing to work from home. Importantly, Lowe emphasised again that the RBA is committed to doing everything it can to support jobs, income and the general economy.
So despite all the uncertainty, homeowners can take comfort in the knowledge that interest rates will remain at an historic low for the foreseeable future. It’s more important than ever to make sure you have the best home loan for you. Make sure your bank is passing on low rates and if it isn’t don’t be afraid to ask. Banks and lenders are also being flexible in repayment conditions so if you’re under financial stress, talk to your bank or contact us. We will help you review all your options and make sure you have the best home loan for you and your unique situation.