Mortgage holders brace for rates decision

·3-min read

The Reserve Bank of Australia's September cash rate decision will dominate the week's economic news alongside economic growth figures due midweek.

There will be a few key data releases before the central bank's board meets on Tuesday, including business indicators for the June quarter from the Australian Bureau of Statistics.

Melbourne Institute's monthly inflation gauge and ANZ's job advertisements report will also be released on Monday.

On Tuesday, mortgage holders will be eyeing the official cash rate decision nervously, with another hike broadly expected.

Most economists and analysts - 23 out of the 36 questioned by Finder - predict a 50 basis point hike.

This will take the cash rate to 2.35 per cent.

However, the bulk of experts - 25 out of 36 - also expect the September hike to be followed by a hold in October.

The survey comes as the Greens call on the Reserve Bank to pause any interest rate rises until after the October budget to put pressure on the government to limit inflation by tackling corporate profits and providing cost-of-living relief.

"This is not the 1970s. We have a profit-price spiral, not a wage-price spiral," Greens economy spokesman Nick McKim said in a statement on Sunday.

"Instead of jawboning down wages, (RBA governor) Philip Lowe should be jawboning down corporate profits and heaping pressure on the government to do something about (inflation)."

While the central bank has warned of more hikes to come, some economy-watchers have predicted the bank will pause its aggressive tightening next month to see how the market is responding.

"The rate increases in recent months are yet to be fully felt by the market so we believe there's a case for the Reserve Bank to take stock of the impacts to date," Laing+Simmons director Leanne Pilkington said.

The ABS will release its national accounts report, which includes the key gross domestic product numbers, for the June quarter on Wednesday.

Commonwealth Bank economists are predicting the economy to have grown by 0.8 per cent in the quarter, while NAB's chief economist Alan Oster expects a 0.7 per cent quarterly increase.

On Thursday, the RBA's Lowe will deliver a speech on the economic outlook and monetary policy at the Anika Foundation in Sydney.

The ABS will also release trade data as well as payroll jobs figures.

At the end of the week, the National Skills Commission will provide a preliminary update on job vacancies for the month.

The national statistics bureau will also release "monthly business turnover indicator" data on Friday.

Meanwhile, the Australian stock exchange is expected to open lower on Monday after Wall Street ended down on Friday amid ongoing worries about the European gas crisis.

The US S&P 500 lost 1.06 per cent to end at 3,925.62 points, while the Nasdaq Composite lost 1.31 per cent to close at 11,631.01. The Dow Jones Industrial Average fell 1.03 per cent to 31,329.19.

US markets are closed on Monday for the Labor Day holiday.

On the local market, the Australian Securities Exchange September SPI200 futures contract fell 16 points to 6792 points, pointing to a softer trading start to the week.

On Friday, the benchmark S&P/ASX200 index finished at 6828.7, down 0.25 per cent, while the broader All Ordinaries dropped 0.33 per cent to 7056.3.