Surveys are showing that as individuals, mortgage holders like me are more pessimistic than the experts about how many interest rate rises we are going to have to pay out for in the next year or so. I guess those of us who are the ones who’ll have to dig deeper in our pockets are more likely to be concerned about this, and it translates into statistics stating that consumers believe there will be at least three rises in interest rates in the next twelve months.
The relevant surveys came from a Sydney Morning Herald poll and the Westpac-Melbourne Institute Consumer sentiment survey of this month, which asked people about their outlook on interest rates in a year’s time. The Herald results showed that two thirds of the respondents believed there would be at least two more cash rate rises processed by the Reserve Bank within the next year, and the Westpac data suggested that a full 90 per cent of consumers believe there will be more than three increases in the same time period. Clearly those surveys don’t quite match up, but at a minimum we can say that there is definitely a high presumption of rates increasing if you ask the average mortgage holding consumer, like me.
Curiously, the experts don’t quite agree with us, and for once I hope they are right! For example, the investment market in Australia, according to this Herald article, is factoring in just one single interest rate rise within the next twelve months, despite hearing optimistic economic growth news with the latest job growth statistics. They say that the instability of the global economy makes it unlikely that we will have more than a single interest rate rise. We’ll have to wait and see, and personally I feel like there’ll be more, but I sure hope this feeling is wrong.