Westpac chief economist Bill Evans expects that the Reserve Bank will keep the cash rate at 3.6 per cent in April, ending a run of ten straight rate hikes.

Evans is, however, expecting another 25 basis point hike in May, which will see it sit at 3.85 per cent.

“Prior to the Governor’s surprisingly hawkish response to the December quarter Inflation Report where he effectively signalled consecutive rate hikes in both March and April, Westpac had expected that there would be a pause in April with a final hike in May,” Evans (pictured below) said.

“The Governor has had an ‘about-face’ following the March Board meeting. He responded to the disappointing growth print for the December quarter; the slower than expected wages gain in the December quarter; and the 0.4 per cent fall in the monthly inflation index in January.

“So, the tentative signal in March was much changed from the confident signal in February.”