Interest rates tipped to stay on hold

Submitted 6/07/2009

AAP


The central bank is expected to leave interest rates on hold for a third straight month in July as more signs emerge that the economy is faring better than most amid the global recession. All of the 19 economists surveyed by AAP this week expected the Reserve Bank of Australia to leave the cash rate at a 49-year low of 3 per cent at Tuesday's RBA board meeting. AMP Capital Investors senior economist Robert Cunneen said recent economic data and indicators of improved consumer and business confidence pointed to growth picking up in the second half of 2009. "There's no real impulse for the central bank to change at this point in time," Mr Cunneen said. The last change to the cash rate was in April, when the RBA delivered a 25 basis point cut. Retail turnover rose 7.4 per cent between September last year and May compared with a paltry 0.4 per cent increase in the preceding eight months, as government cash handouts and low interest rates boosted disposable income.