In its decision the Reserve Bank made the following comments:
"Growth in the global economy continued at a moderate pace in 2014. China's growth was in line with policymakers' objectives. The US economy continued to strengthen, but the euro area and Japanese economies were both weaker than expected. Forecasts for global growth in 2015 envisage continued moderate growth.
Commodity prices have continued to decline, in some cases sharply. The price of oil in particular has fallen significantly over the past few months. These trends appear to reflect a combination of lower growth in demand and, more importantly, significant increases in supply. The much lower levels of energy prices will act to strengthen global output and temporarily to lower CPI inflation rates.
Financial conditions are very accommodative globally, with long-term borrowing rates for several major sovereigns reaching new all-time lows over recent months. Some risk spreads have widened a little but overall financing costs for creditworthy borrowers remain remarkably low.
In Australia the available information suggests that growth is continuing at a below-trend pace, with domestic demand growth overall quite weak. As a result, the unemployment rate has gradually moved higher over the past year. The fall in energy prices can be expected to offer significant support to consumer spending, but at the same time the decline in the terms of trade is reducing income growth. Overall, the Bank's assessment is that output growth will probably remain a little below trend for somewhat longer, and the rate of unemployment peak a little higher, than earlier expected. The economy is likely to be operating with a degree of spare capacity for some time yet.
The CPI recorded the lowest increase for several years in 2014. This was affected by the sharp decline in oil prices at the end of the year and the removal of the price on carbon. Measures of underlying inflation also declined a little, to around 2¼ per cent over the year. With growth in labour costs subdued, it appears likely that inflation will remain consistent with the target over the next one to two years, even with a lower exchange rate."
Been thinking about making the move into home ownership? Now is the time to take action!
The Reserve Bank has held the cash rate atan all time low for over a year now, and this is great news for consumers. The cash rate being low means that banks and other credit providers around Australia are offering extremely low interest rates for you to take advantage of.
There is literally no better time than now to make the move into home ownership, or even refinance your existing mortgage. Your broker will be more than happy to review your current loan to make sure that it is still the most suitable and beneficial financial solution. Your circumstances, along with interest rates, may have changed since your mortgage was put in place and there may now be a better deal available for you.
Give Iconic a call today to arrange a complimentary appointment with a finance consultant, whether it be for buying a new home or refinancing your existing mortgage at a lower interest rate, Iconic will take you through it.
Send us an email now or call us on 1300 663 943.
Have a great week ahead!
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