Westpac tips more rate cuts in new year

Westpac chief executive Gail Kelly has urged the Reserve Bank to cut interest rates further early next year.

“I would be in the same camp as most of the market actually in saying there's likely to be a further rate reduction in the new year, whether it is February or March,” Mrs Kelly said.

“The key driver of that is, I think, what we've seen in regard to consumer and business confidence. I think we need a little bit more in the way of confidence, building in our overall market.”

Mrs Kelly acknowledged the RBA was being forced to cut the official rate to compensate for the banks' repricing, but denied this was being used by the banks when deciding whether to hold back the full benefit of cuts from mortgage holders.

“They're (RBA) fully appreciative of the funding dynamic with which we are dealing and they're adjusting downwards and assess on the basis of what we do and they may well, in my view, make a further adjustment in the new year,” Mrs Kelly said.

Source: The Australian