The National Australia Bank (NAB) has become the latest to scrap their call for an increase in the country's interest rate next year, citing inflation pressure and declining property values.
"We have delayed our expectation for the first Reserve Bank of Australia (RBA) increase in the cash rate to the second half of 2020," NAB chief economist Alan Oster said on Wednesday.
The RBA has held the cash rate at 1.5 percent since August 2016, and hasn't made an increase since 2010.
While Australia's economy has behaved much as NAB predicted during the year, persistent weakness in wage and inflationary pressures and steeper declines in house prices in the major cities caused bank analysts to change their time frame.
"While output growth has been largely as expected over the 2018, wages pressure remains weak and hence inflationary pressure has remained low, with the core measures continuing to track below the RBA's target band. We expect that will continue through all of 2019," Oster said.
"We have delayed our expectation for the first Reserve Bank of Australia (RBA) increase in the cash rate to the second half of 2020," NAB chief economist Alan Oster said on Wednesday.
The RBA has held the cash rate at 1.5 percent since August 2016, and hasn't made an increase since 2010.
While Australia's economy has behaved much as NAB predicted during the year, persistent weakness in wage and inflationary pressures and steeper declines in house prices in the major cities caused bank analysts to change their time frame.
"While output growth has been largely as expected over the 2018, wages pressure remains weak and hence inflationary pressure has remained low, with the core measures continuing to track below the RBA's target band. We expect that will continue through all of 2019," Oster said.
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