Chris Caton, the Chief Economist from BT Financial Group is the bearer of bad news – the easy money’s gone. Interest rates are low all around the globe, with New Zealand the only country bucking the trend and raising their rates in 2014. In Caton’s opinion, that’s about to end with rates likely to rise in the US, Australia and the UK in 2015.
Speculation persists as to the likely timing of the rise, with popular sentiment being around mid-2015 – the speed of the rise is also highly questionable. In Australia, the cash rate has been unchanged for 15 months and the economy remains in a soft spot. According to Caton, the unemployment rate is still on the rise, which would flag cuts, however the Reserve Bank has raised a warning flag.
“Housing is a particular concern, the pace of investor borrowing in Sydney has increased 90% in the last two year” says Caton. “Rates are likely to remain on hold as long as this concern remains. The next move is still likely to be up, but not until Mid-2015.
So what does this mean for you? January is the best time for you to review your current situation and see that if you’re well set up for the year ahead. While we can’t predict exactly what will happen, we can work with you to ensure that you best prepared for what the year holds.
And now you’re wondering what the upside is? Interest Rates are going up! Excellent news for those with term deposits that are coming to term and high interest savers.
If you’re unsure if you’re set up for success, call or email us today and we’ll talk through your situation specifically to get you the best result possible.