INTEREST
RATES OUTLOOK
NO CHANGE TO OFFICIAL INTEREST RATES
The Board of the Reserve Bank of Australia has not changed official
interest rates at its monthly meeting. The official cash rate
remains untouched at 5.25 percent for the 11th consecutive month.
THE PUSH FOR A RISE?
The RBA’s decision not to increase the offical cash rate
is in contrast to the views of various respected players. These
include:
TIPPING A RISE
The Quarterly Outlook forecast from Access Economics insists interest
rates will rise. The logic behind this statement includes the
facts that underlying inflation is rising whereas house prices
have topped out, global rates are increasing and will continue
to do so despite the continued lift in oil prices. The company
also cites the way world commodity prices are topping out and
how the Aussie dollar has “done its dash for this cycle”
whereas the US dollar is “well supported”.
WHO WANTS HIGHER?
Citibank's chief economist, Stephen Halmarick, insists that despite
the recent stability of interest rates the RBA is still looking
for a trigger for a rise. He says that while recent weak business
data has prevented a lift, a rise is inevitable with the timing
being before the year’s end or early next year at the latest.
He is predicting an increase of as much as half a percentage point.
HOW HIGH OIL?
Global analysts agree that increasing oil prices will hit interest
rates but they are dismissing Saudi pledges to lift production
saying price increases are certain with the world going into the
northern hemisphere winter. Some say that now markets have accepted
$US50 a barrel as a bargain then a stable $US60 is a reality within
3 to 4 months.
COST OF OIL PRICES.
A Commonwealth Bank report puts the oil price increase so far
as having cost the average household nearly $6 a week, a little
short of the approximate cost of a 0.25% rise in interest rates.
But the effect lifts to nearly 2 percentage points if oil reaches
$US60 a barrel. Federal Treasury is predicting no relief in oil
prices before next June. (Note: Australia is reasonably protected
from the worst effects of high oil prices due to the fact that
we are a net energy exporter. But with parity pricing, the biggest
winner is the Federal Government while the loser is consumer spending
and with it business growth.)
INFLATION PRESSURES
Reactions vary to the last quarterly CPI which stated annual inflation
had risen by 0.4% to 2.3% p.a. Predictably, the Federal Government
is sure such a figure is within budget estimates while advocates
of an interest rate rise cite this as another reason.
BUSINESS NEWS
I.T. COMING BACK
More and more job surveys are confirming that I.T. jobs are returning
from the slump of a few years ago. They also indicate the high
salaries previously being paid are also back on the agenda. This
shift in supply and demand brings with it higher charges for consultants
and equipment.
MORE HOMEWORK
Computer giant Toshiba's recent research into the move to work
at home, reveals nearly 40 percent of organisations say they are
now open to such flexibility with their employees. Unfortunately
it also shows over 50 percent of managers distrust such an arrangement.
WHAT, NO GIRLS?
BRW magazine is currently compiling the next Young Rich list and
is concerned about the current data having only 18 percent women.
The publication is keen to hear from females of suitable age to
redress the balance.
BUSINESS OUTLOOK
LOOKING GOOD
Access Economics insists the present situation of growth being
good, prosperity high and unemployment low, will be around for
some time. The only problem could be the way house prices may
undergo a soft landing and generous election give-aways will keep
the economy going sweetly for some time. The company says interest
rates won't rise too much inside two years and our commodity prices
will remain high.
SENATE FOR SMALL BUSINESS
The Coalition government has confirmed that its newly acquired
control of the Senate will see various stalled bills pushed as
early as practical. Among the priorities will be various industrial
reforms including lessening the demands for small business staff
retrenchment.
To find out more about the benefits of Debtor
Finance please contact Oxford direct on 1800 850 509. Alternatively
visit www.oxfordfunding.com.au.
