They are more or less unanimous on this one…
The Reserve Bank of Australia is set for back-to-back half-percentage point interest rate hikes this July according to a Bloomberg survey of economists. If predictions are correct, it will be the first time for Australia’s central bank to increase rates by 0.50% twice in a row.
Predictions were nearly unanimous: 25 of the 26 respondents expected the RBA to raise its cash rate to 1.35% on July 05 from its current 0.85%, following the larger-than-expected half-point climb last month. Sole dissenter Market Economics called for an even bigger climb of 0.75%.
Read more: Brace for another huge rate hike
Goldman Sachs, one of those who correctly predicted June’s 0.50% rate increase, has also forecast the RBA would announce another half-point hike in July. It further predicted that the RBA would keep raising the benchmark to 3.1% by year-end, a view shared by Singapore-based rates strategists at TD Securities.
Economists at Commonwealth Bank of Australia agree that a 50-basis-point increase would be the obvious choice for the RBA, but believe the RBA will tread cautiously afterwards, with December seeing a cash rate rise of only 2.1%, below the 2.5% median among respondents.
Read next: Australians spend big after big rate increase
The RBA is among more than 80 monetary authorities to have raised rates this year in the struggle to rein in escalating inflation and address offshore pressures from the war in Ukraine, BNN Bloomberg reported.
