MARKETS SPECTATOR: Goldman's rates tip

Goldman Sachs predicts a Reserve Bank interest rate cut next month and an even lower cash rate by November.

Despite government economic stimulus measures, favourable weather conditions, record low interest rates and wealth gains the disappointing economic numbers will push the Reserve Bank of Australia to cut its benchmark cash rate to 2.5 per cent next month, says Goldman Sachs analyst Tim Toohey.

Australia’s gross domestic product in the three months to March 31 rose 0.6 per cent compared with Toohey’s forecast of 0.8 per cent and a Bloomberg consensus forecast of 0.7 per cent.

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