Consumers anticipate interest rate cut before Christmas

Many believe that the Reserve Bank is set to cut the official interest rate again, ahead of their final meeting for 2011 next week.

A survey by home loan provider Loan Market found that 39% expect the Reserve Bank to lower central interest rates again next week, while 26% believe it will happen early next year instead.

There is pressure on the RBA to stimulate sectors of the economy that are seen to be in structural difficulty, and Australians are anticipating the cut by revealing mixed spending plans for the Christmas period.

Consumer sentiment across the Australian Spring season has been largely cautious. Disciplined consumers have been focussing their attention on reducing credit card debts rather than considering further expenditure.

Now, it seems, festive cheer is starting to loosen this resolve. Reports from IBISWorld suggest that consumers are prepared to spend an average of $1,200 over Christmas, with some planning to spend more than last year, while some remain determined to stick to their austerity plans.

Certainly, 2011 has shown Australians to have become increasingly savvy about financial efficiency, debt management, and finding value for money.

Are you looking to make savings over Christmas? Why not check out Which4U's savings account listings before a possible fall in interest rates downgrades the interest?

Are you looking to make the most out of your spending over Christmas? While there’s time, why not apply for a credit card with 0% purchases, and give yourself extra time to spread the payments with minimal extra charges?

Joe Letts