Home mortgage rates to stay on hold

Consumer spending has slowed in Australia, further easing pressure on inflation and the possibility of interest rates this month and through the year.
Investor confidence in the Australian dollar also took a hit after official figures released yesterday revealed a fall in home building approvals, along with the spending slowdown.
The Aussie is down almost 3 per cent since last month's Consumer Price Index showed the first fall in prices in eight years.
Although the Reserve Bank has its first meeting of the year today, any announcement on interest rates will not happen until tomorrow -- and then only if rates change.
The 0.3 per cent lift in monthly consumer spending in December to $18.45 billion was below economists' expectations of a 0.5 per cent rise.
In response to three rate rises last year, debt-bound households have curbed their spending.
CommSec chief equities economist Craig James said the economic data meant the RBA would have an easy decision in keeping interest rates steady at 6.25 per cent.
"The economy has clearly softened in response to the rate hikes delivered over 2006 with new figures on building approvals, retail spending, jobs and activity in the services sector all decidedly soggy in the latest month," Mr James said.
The TD Securities-Melbourne Institute inflation gauge also released yesterday showed inflation was unchanged in January as petrol prices fell.
The average family is spending about $157 a month on petrol -- down from almost $200 a month in June and August.
The RBA lifted rates in May, August and November last year to curb inflation, which was running above the central bank's target band of 2-3 per cent.
Macquarie Bank interest rate strategist Rory Robertson said the RBA would be thrilled with the clear deceleration in consumption growth and unemployment being at its lowest level in three decades.
"The Australian economy is in a really good place," he said.
Mr Robertson said the next interest rate move was so far off it was impossible to make a meaningful call on whether it would be up or down.
He said the April CPI numbers, tracking the first three months of the year, would be the next litmus test for inflation and interest rates.
Mr James said the good news for retailers was that, as interest rate fears receded, consumer confidence and spending would increase.
"Some retailers were forced to cut prices in the last three months to get consumers to part with their hard- earned dollars," Mr James said.
"While major retailers have reported healthy sales in recent months, the key question is how much of the rise was at the expense of bottom-line profits."
Australian Bureau of Statistics figures showed a 0.7 per cent rise to $53 billion in retail turnover in the December quarter.
The Australian dollar closed at US77.33, down marginally for the day after recovering from a sharp turn when the data was released.
In mid-January the Aussie hit a high of US79.8.
Source: Herald Sun