And why not? It already has the data
Treasurer Wayne Swan has effectively conceded the case for an increase in interest rates ahead of today's Reserve Bank meeting saying "I think most families understand rates are currently at 1970s levels and can't stay there forever".
The Reserve Bank board will meet from 9.00 this morning and announce its decision at 2.30 this afternoon.
Unusually bank customers have offered some certainty ahead of the announcement following a commitment by the National Australia Bank to limit its increase to the 0.25 points expected from the Reserve.
"This is integral to our long-term business strategy which is unashamedly competitive and commercial," said NAB executive Lisa Gray. "We are attracting new customers and retaining existing ones while changing the game"...
In December NAB became the only major bank not to follow Westpac and lift its mortgage rates by more than Reserve, opening up the widest gap between two of the major banks on record.
Westpac's standard variable mortgage rate is already above 7 per cent, but so low is that NAB's rate that even after today's expected 0.25 point increase it will still be below 7 per cent.
Wayne Swan yesterday praised NAB's move saying it had "thrown down the gauntlet to its competitors to do the right thing by families or risk losing valuable business".
"NAB's approach will certainly look very appealing to customers of any other bank that tries to take families for a ride," he said.
An increase of 0.25 points would add a further $48 to the monthly cost of repaying a $300,000 mortgage taking the total hike since October to $187. But the monthly bill would still be some $230 below where it was in the final months of the Coalition's term in office before the onset of the financial crisis.
Futures market pricing puts a 65 per cent probability on a rate hike today, but when surveyed by Reuters few market economists were confident of the outcome, most saying there was a chance of between 40 and 60 per cent.
Reserve Bank Governor Glenn Stevens made it clear on breakfast television last week that rates were headed higher imploring viewers not to "assume they'll stay low" and saying it would be unwise "to leave rates right down at rock bottom any longer than we need".
But events since the broadcast have cast doubt on the timing. Retail sales turned out to be unexpectedly flat in February and growth in building approvals slipped in what may be signs of underlying weakness as stimulus measures wear off.
Adding to the case that the economy is strong enough to withstand an further hike is a surprise jump in internet job advertisements of 5 per cent in March, building on a jump of 2 per cent in February.
"This is the biggest rise in online job ads since January 2008," said Robert Olivier of Advantage recruiting releasing the results Sunday. "It's a remarkable turnaround considering that less than a year ago the market was down 51 per cent."
Victorian job ads increased faster than the national average with the biggest jumps in ads for transport and human resources workers, up 14 and 12 per cent.
Published in today's Age
WHO WOULD YOU RATHER BANK WITH?
Variable mortgage rates ahead of the hike
St George 6.93%
ANZ Bank 6.91%
National Australia 6.74%
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