News

Wealth Pi Fortnightly Economic Snapshot

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Interest Rates

Probability of rate increase at next RBA meeting in August 2024 is at 10% for 25bp.

RBA

The Reserve Bank of Australia has decided to maintain the cash rate, citing persistently high inflation, tighter-than-expected labour market conditions, and a gradual reduction in economic growth, with inflation expected to return to the target range by the second half of 2025 amid global economic uncertainties and subdued domestic demand.

Australian Markets

Nearly half of Australian businesses (46%) reported innovation activity in the two years up to June 2023, a decrease from 52% in the previous period, with economic pressures and lack of skilled workers cited as major barriers, while many businesses, especially small ones, focused on cost-effective innovations such as marketing and improving internal practices.

Global Markets

US:

Home prices in the U.S. rose by 0.3% in May 2024, the smallest increase since January 2023, due to a slight increase in new listings and high mortgage rates, with the potential for future price growth dependent on whether buyers or sellers return to the market more rapidly as mortgage rates are expected to decline later in the year.

UK:

As of April 2024, the average house price in the UK is £264,300, unchanged from March 2024, with a slight annual decrease of 0.1% (£210) due to modest increases in new listings and high mortgage rates affecting buyer demand.

Property

Mortgage arrears in Australia have risen from their COVID lows, reaching 1.6% in Q1 2024, driven by higher non-performing loans and increased cost of debt, while strong underwriting standards and conservative lending policies help mitigate the risks of significant defaults.

 

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