The economy has slowed right down, so there is a strong expectation that the Reserve Bank might look at cutting the official interest rate, potentially saving a fair number of people from being forced to sell their home. According to Terry McCrann, a rates cut is a dead-set certainty:
“A rate cut at the September RBA meeting in little more than four weeks is certain. It won’t be the last and it could be half of 1 per cent.”
– Terry McCrann, Herald Sun
Terry is being too optimistic there. A Reuters survey of 21 financial insitutions found that about half of them think we’ll see a cut in interest rates in November, after the September quarter figures have been released.
“With world oil prices falling sharply and global financial markets likely to settle down eventually, the National Australia Bank’s chief economist, Alan Oster, predicts rates could fall quite a lot in 2009.”
– The Age
So it seems highly likely that interest rates will drop, possibly later this year, and almost certainly in 2009.