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Home buyers hold their breath

Australia’s 2.5 million-plus mortgage holders hope Stewart Ferns is right.

The Merrill Lynch economist believes the Reserve Bank of Australia will hold interest rates at 5.75 per cent in its next meeting on August 1.

Mr Ferns is all but alone in his belief, with most economists tipping a rate rise of 25 basis points next month, and some even predicting two more rate increases before the end of 2006.

But his view is that the RBA will be keen to see the full impact of its most recent interest rate rise in May and study the state of a slowing world economy before it moves to raise official cash rates(….more)

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