Over the past few weeks we’ve posted a number of articles with the release key economic data by the ABS. Specifically employment and inflation data and the significance of these figures on the RBA decisions around interest rates and the flow on effect of these factors for motorcycle loans.
Now we post on the latest event in regard to rates and the economy – the August meeting of the Reserve Bank of Australia Board and the resulting rate decision. A further cash rate rise by the RBA in August was widely tipped and expected and on cue, the RBA delivered. A 0.5% increase in the cash rate was announced by the RBA on 2 August, which will result in further rises in lending rates across the markets.
With four consecutive months of RBA rate rises buyers seeking motorcycle loans can refer to specialist lender Jade Bike Loans for cheaper interest rate loans. Our services are focused on achieving cheaper motorcycle loan interest rates for our customers.
To assist buyers get their head around the latest RBA decision and the ensuing effect on loans, we report on the RBA’s statement and outline the impact on existing loans and new loan applications.
At its monthly meeting in August 2022, the RBA Board made the decision to lift the official cash rate by a further 0.5%. This represented the fourth consecutive increase and lifted the rate to 1.85%. 1.75% of increases in just the past four months.
In announcing the decision, the Board confirmed its priority in regard to monetary policy of returning the inflation rate to its preferred target which is 2-3%. While working towards this target, the Board is working to maintain balance and an even keel in the Australian economy. Noting the slender path towards achieving such objectives.
The statement includes mention of the downgrading of growth outlooks globally due to soaring inflation, rising rates in most countries, the Ukraine war and the measures taken by China to contain the latest COVID outbreak. At 6.1% inflation in Australia is at its highest level since the start of the 1990s. Pressure on rising prices is coming from the strong levels of demand coupled with the low unemployment rates and other factors which are restricting businesses from operating at full capacity and as such restricting supply.
While global events are impacting Australia’s economic conditions, the floods of earlier in the year are also seen as a major impact on rising food prices. The outlook by the RBA in regard to inflation is to reach a peak 7.75% around the end of 2022 followed by falls to 4% next year before the target 3% is achieved in 2024.
Economic growth is expected to record a reduced pace but with strong overall growth. GDP for 2022 is forecast at 3.25% and for 2023 and the 2024 at 1.75%. Unemployment is expected to fall further in the months ahead.
One of the key uncertainties as noted by the RBA is in regard to spending by households. Soaring inflation and prices is putting pressure on the costs of living budgets and there has been a fall in consumer confidence. But on the positive side, the low unemployment indicates that jobs and extra work are being acquired. Thus strengthening the income side.
The RBA says that the rate rise is part of its ongoing normalisation process and additional steps will likely be required. Exactly when further rate rises will be announced and the size of those rise, will be based on data around economic conditions.
Motorcycle Loans Impacts
For buyers that secured their motorbike and their loan previously and with a fixed interest rate, you should not be impacted by the recent RBA rate rise. Rises in the cash rate have the effect of causing lenders to increase the rates they apply in their different loan markets. The size of rises can vary across the selection of lenders and across markets. You can see this clearly in comparing interest rates that we are currently achieving.
With rates rising, buyers requiring finance will be wise to seek the cheapest interest rate loan and a fixed interest rate loan. Jade Bike Loans has fixed interest rates on our Secured Motorbike Loans. This ensures our customers that their rate, their repayments and their loan in general remains unchanged when the RBA and lenders increase interest rates.
As Governor Lowe indicated in the August RBA Statement, further rises are highly likely in coming months. How much any future rises will be, will be determined by the economic conditions as they play out. Some economists have forecast that the cash rate will hit 2.6% by the end of the year. That would up on the current 1.85%. That gives you some idea of what may lay ahead.
Further outlook forecast reports do have rates being cut during next year due to the predicted slowdown in economic growth. Outlooks, forecasts and predictions are made regularly by economists and analysts and time and the economy will determine their accuracy.
Buyers seeking a quick, efficient and time-saving way to source the cheapest motorcycle loans can simply contact Jade Bike Loans. Our accreditations with many lenders provide us with immediate access to industry knowledge as to which lender is currently offering the best rate to suit a particular loan application. Requesting a quick quote is obligation-free and can be made via phone or online.
To source cheaper motorcycle loans contact Jade Bike Loans at 1300 000 003
DISCLAIMER: IN REGARD TO ANY ERRORS OR MISREPRESENTATIONS IN THIS MATERIAL, NO LIABILITY IS ACCEPTED. THE DETAILS, CONTENT AND DATA ARE PRESENTED PURELY FOR GENERAL INFORMATIONAL PURPOSES FOR MOTORBIKE BUYERS AND THOSE SEEKING MOTORCYCLE LOANS. THIS IS NOT INTENDED AS THE SOLE SOURCE OF INFORMATION FOR FINANCIAL DECISIONS. IF SPECIFIC ADVICE IS REQUIRED AROUND FINANCIAL DECISIONS, READERS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
