Business opinion survey gives Reserve Bank dilemma
A survey of business opinion out today showing the economy is motoring near full capacity will leave the Reserve Bank with a devilish dilemma on interest rates later this year.
Wednesday, October 13th 2004, 3:25AM
by The Landlord
The Institute of Economic Research's Quarterly Survey of Business Opinion suggests a rate hike at the RB next review on October 28 is a near certainty.And, according to institute senior economist Doug Steel, today's data increases the chances of the seventh rate hike this year in December.
But the latter is likely to be when the economy is finally turning down as the effects of previous rate hikes, the high dollar, rising oil prices and slowdowns in migration and house construction bite.
Business is already gloomy about the prospects six months ahead with a net 16 per cent pessimistic - although that is less gloomy than in the June quarter when a net 20 per cent expected a deterioration in conditions.
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