Pointless poll finds - surprise surprise - that people expect a rate rise

Posted on 10/05/2011  

First prize for the most pointless research survey this year is the one that asked people whether they expect interest rates to rise in 2011.

The poll by mortgage broker Loan Market found that 67% of respondents expect an interest rate increase some time this year.

The only surprise there is that the number expecting an interest rate rise is so low!

Media has been giving us interest rate speculation every day since the beginning of the year, most of it predicting that an interest rate rise is imminent. Little wonder that a majority of Australian residents expect a rise.

So far the pundits have been proven wrong, as the Reserve Bank has made it clear that it was not intending to raise the cash rate any time soon and has been true to its word. The last rate change was six months ago.

The theory appears to be that if you keeppredicting an interest rate rise, eventually you will be proven correct.

Unfortunately, the calm and consistent words of Reserve Bank governor Glenn Stevens have received little media airplay, whereas the daily speculation by chattering economists of impending increases have received relentless publicity, despite the fact that they keep getting it wrong.

Economists and the media continue to believe that we’re all obsessed with interest rates, and therefore a prediction about an imminent hike is a cheap and easy headline.

The Loan Market survey serves no purpose other than to generate some publicity for the company.

ENDS

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