Westpac says rates will come down

Westpac is predicting a 1 per cent cut to interest rates by the end of 2012. This is in contrast to ANZ, for example, which predicts the Reserve Bank will hold rates steady for at least six months before raising them in early 2012.

Bob Coombe, who heads home and small business lending at Westpac, says if low consumer sentiment continues, interest rates could be cut, although it isn’t clear when this might happen.

“We were all talking not long ago that rates could go up, but if the consumer sentiment remains subdued there may be interest rate deductions and if that occurs that would be a very strong stimulus for the consumer to save less and spend a little bit more,” Coombe says.

Source: Startup Smart