The Reserve Bank board is expected to leave the official interest rate unchanged when it meets today.
Rates have been at a record low for more than a year now, after the Reserve Bank last moved on official interest rates in August 2013, when it cut the rate to 2.5 per cent.
Economists surveyed by Bloomberg are unanimous in their belief that the central bank will not move today.
National Australia Bank senior economist David de Garis says he expects rates to remain on hold for another year.
“They’re signalling a period of rate stability which suggests they’re in no hurry to do anything other than leave rates where they are for the time being,” he said.
The RBA has been reluctant to raise interest rates with weak employment growth and fragile consumer confidence, however strong growth in house prices – confirmed by RP Data figures yesterday – is a factor weighing against further rate cuts.
National Australia Bank senior economist David de Garis says there have been some signs of improvement in the economy, but not enough.
“It tells us the Reserve Bank is I guess in some ways frustrated with the lack of response in aggregate demand to the low interest rates that we’ve had,” he said.
At the moment, if the bank were to move, David De Garis says it would most likely be a rate cut.
“‘I think the Reserve Bank’s judgement at the moment is that the economy still needs support for the foreseeable future and that if there was to be any change in the near term it could well be lower rather than higher,” he added.