In this month’s Finder RBA Cash Rate Survey™, 38 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
All experts (100%, 38/38) correctly predicted a cash rate hold – keeping it at 4.35% in November.
Graham Cooke, head of consumer research at Finder, said pressure was mounting for a rate cut in February next year.
“Even though inflation has hit the RBA’s target window of 2-3%, this doesn’t trigger the RBA to automatically start cutting rates – which will disappoint homeowners.
“With a record high 47% of borrowers struggling to make their repayments in October, thousands will be forced to cut back on spending in other areas.
“Many are depending on the multiple rate cuts predicted to come in 2025,” Cooke said.
This comes as Finder analysis shows the average punter is predicted to fork out $85 on the Melbourne Cup this year.
The cost of living crisis is “exaggerated” according to more than a quarter of experts
The majority of Australians (81%) – equivalent to 16.9 million people – reported feeling financially stressed in October, according to data from Finder’s Consumer Sentiment Tracker.
Despite high levels of financial concern, 28% (7/25) of panellists who weighed in* say the cost of living crisis is exaggerated.
Mark Crosby from Monash University said while real wage growth has stagnated in the past few years, the reality is that most people are far better off and remain in jobs.
“Much of the rise in the cost of living has been associated with rising energy costs and one off factors.
“For those in the lowest quintile of the income distribution these cost increases should be addressed, but for middle income earners, we are still a wealthy country,” Crosby said.
Jakob Madsen agreed, noting that government pensions and other transfers are indexed to CPI and real wages have hardly decreased.
“During the Great Depression real wages fell by more than 30% in Australia. In Italy real wages fell to 75% over the period 1450-1900. During WWII, real wages plummeted in most countries.
“Seen from this perspective, calling it a cost-of-living crisis is a stretch,” Madsen said.
Most experts however (72%, 18/25) don’t think the crisis is exaggerated.
Noel Whittaker from QUT said, “Talk to anybody and you’ll soon be told that cost-of-living is one of their major issues.”
Full Article: Finder
