Hold onto your seatbelts, after a couple of years” reprieve, you could be in for a wild interest rate ride. That”s the prediction of BIS Shrapnel senior manager of residential property Angie Zigomanis.

It may sound a bit implausible given that swirling around the silver lining of an interest rate cut over the last week, there”s been plenty of gloomy news.

The Reserve Bank has swiftly changed its tone from upbeat to down. In its most recent Statement on Monetary Policy, the bank repeatedly highlighted that risks to the global economy are “skewed to the downside, with the sovereign debt and banking http://www.phpaide.com/?langue=fr&id=16 problems in the Euro area remaining the most prominent risks”.

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If it”s interest rate cuts you”re after, that should be music to your ears.

“A follow-up rate cut remains on the radar screen. The question is one of timing,” says CommSec chief economist Craig James.

“If there is more instability in Europe, then another rate cut in December can”t be ruled out. But we currently favour the next move to be made in February, after the next inflation figures in late acclainsetscasino.com January.”

Job ads have slid for the sixth time in the past seven months, leading James to predict a jobless rate closer to 5.5 per cent later in 2011 or early in 2012. “A softer job market will keep downward pressure on wages and prices,” he says.

But assuming the US and the Euro zone economies manage to haul themselves out of their collective trough – and that”s a big assumption – we could see rates back on their way up within a couple of years.

And given that old rule about what goes up coming down, and vice versa, rate hikes will obviously have to come at some stage – it”s just a question of when.

Source SMH

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