Unemployment Rise Forces Rate Drop
The Coalition winning the Australian federal election not only came as a surprise, but it also meant that Australian’s dodged unwanted negative gearing changes. A move that many financial and property experts have said would have a profound impact on housing investment.
Given this unexpected result, consumer confidence has improved. But despite this unemployment rates rose, forcing the Reserve Bank to drop the official cash rate.
Economists say that this may be the first of many cuts to come. If unemployment and inflation continue to stall, then a further rate cut, possibly two may occur over the next 6-months. Of course, this will depend on several economic indicators.
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Article sourced from eChoice