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Interest Rate predictions

Posted by Tamara McDowell on April 7, 2010

Analysts are split on what the Reserve Bank would consider a neutral setting for the cash rate and are predicting that it will sit between 4.25% and 5.25% by December – it is currently 4.25% after the rate rise yesterday.

On the low end of the scale, Clifford Bennett of Kinetic Securities and Stephen Roberts of Nomura think rates will not go any higher, while BIS Shrapnel and Westpac are predicting a cash rate of 4.5%.

According to SKY News, AMP and St George think the cash rate will rise to 4.75% by year-end, while ANZ, JP Morgan and Macquarie think the central bank will stop its tightening policy at 5% this year. Only NAB thinks the cash rate will go to 5.25%.

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