Financial analyst Mark Bouris has predicted the Reserve Bank of Australia will “definitely” hold interest rates at its meeting in Sydney on Tuesday.
The chairman of the Yellow Brick Road for home loans said he was confident in his forecast after annual inflation fell to 4.9 percent from 5.4 percent in July.
“This is very encouraging,” Mr. Bouris told Sunrise ahead of the RBA meeting.
“That’s one of the lowest numbers we’ve had in a long time.” Good stuff.’
Outgoing Governor Philip Lowe opted to suspend interest rates at an 11-year high of 4.1 percent in August, marking the second straight month of interest rate suspension.
Australian businessman Mark Bouris (pictured with model Monika Radulovic in 2016) said interest rates would start falling in June or July next year
Outgoing Governor Philip Lowe opted to hold interest rates at an 11-year high of 4.1 percent in August, marking the second straight month of interest rate suspension
Host Nat Barr asked the finance guru how long he thought interest rates would last, to which Mr Bouris responded with a message of hope for many Australians.
“Unless something weird happens with the inflation number, when we see a massive spike – which I doubt given the trend – we won’t get a rate hike,” he said.
“In terms of timing of a rate cut, I think they’re going to be bugged a bit for a while to make sure they teach us a lesson about not overspending or overpaying and controlling our household spending. “
“Money market generally expects the cut and interest rates to start around July, August, say this time next year.”
“So we expect our current rate for a year and then some relief.”
Mr Bouris said the government had done “little” to curb rising inflation rates.
“They have done nothing but withdraw their spending or commit to new spending,” he said.
The financial expert said the government could initially increase the price of an item through targeted taxes, for example on cigarettes.
“It stops you from buying it at that price because it’s too expensive,” he explained.
“Fiscal policy is about curbing behavior.”
Financial analyst Mark Bouris has predicted the Reserve Bank of Australia will “definitely” hold interest rates at its meeting in Sydney on Tuesday
He said outgoing RBA Governor Phillip Lowe would have liked governments to work more closely with monetary policy, which the RBA is responsible for.
Statistics Australia said last week that the inflation rate rose 4.9 percent over the last year to July 2023 – the lowest decline since February 2022.
The monthly increase came in below market expectations of 5.2 percent for July.
“The 4.9 percent annual increase this month is down from 5.4 percent in June,” said Michelle Marquardt, head of price statistics at ABS.
“Annual price increases continue to ease from a peak of 8.4 percent in December 2022.”
Gasoline, fruit and vegetable prices have fallen over the year, while electricity and gas bills have skyrocketed and rent has continued to rise, new ABS figures show.
Mr Lowe (right) will chair his final board meeting as RBA governor on Tuesday before handing over to his deputy Michele Bullock (left) on September 18 after enforcing the most drastic rate hikes since 1989
Despite a weaker Australian dollar, petrol prices fell 7.6 per cent over the year, following some moves in crude oil prices that caused unleaded petrol prices to fall back below US$1.90 per liter in major cities.
Fruit and vegetable prices fell 5.4 percent annually, but bread and grain prices rose 9.9 percent, while dairy prices rose 12.7 percent.
Housing costs are still rising, with rents rising 7.6 per cent over the year due to the influx of international students to Sydney and Melbourne.
Electricity prices rose 15.7 percent, despite measures to ease energy bills that resulted in eligible households in New South Wales, South Australia and Tasmania receiving a $500 rebate under a federal program in partnership with states and territories .
Mr Lowe will chair his final board meeting as RBA governor on Tuesday before handing over to his deputy Michele Bullock on September 18 after enforcing the most drastic rate hikes since 1989.
Australia’s VERY mixed inflation results for the year to July 2023
ELECTRICITY: Plus 15.7 percent
GAS: Up 13.9 percent
DAIRY PRODUCTS: Up 12.7 percent
BREAD, muesli: Up 9.9 percent
INSURANCE, FINANCIAL SERVICES: Plus 8.5 percent
RENT: Plus 7.6 percent
HOLIDAY TRAVEL, ACCOMMODATION: Up 5.3 percent
EDUCATION: Up 5.2 percent
HEALTH: Up 5.2 percent
ALCOHOL: Plus 5 percent
MEAT SEAFOOD: Plus 2.4 percent
PETROL: Decrease of 7.6 percent
FRUIT VEGETABLE: Decrease of 5.4 percent