As THLC expected, today the RBA Board decided to lower the cash rate by 25 basis points to 3.25%. Some key points made by the RBA in their decision today:
• Inflation has been low, with underlying measures near 2% over the year to June 2012, and headline CPI inflation lower than that
• The introduction of the carbon price is affecting consumer prices in the current quarter, and this will continue over the next couple of quarters
• The Bank’s assessment remains, at this point, that inflation will be consistent with the target over the next one to two years
• The Board judged that, on the back of international developments, the growth outlook for next year looked a little weaker, while inflation was expected to be consistent with the target
• Credit growth has softened and the exchange rate has remained higher than might have been expected, given the observed decline in export prices and the weaker global outlook
• Interest rates for borrowers have for some months been a little below their medium-term averages
• Investment in dwellings has remained subdued, though there have been some tentative signs of improvement
• Moderate labour market conditions should contain pressure on labour costs in sectors other than those directly affected by the current strength in resources
• This and some continuing improvement in productivity performance will be needed to keep inflation low as the effects of the earlier exchange rate appreciation wane
• Labour market data have shown moderate employment growth and the rate of unemployment has thus far remained low
We will need to wait and see if lenders pass on the cut in the cash rate through to their customers. If you have any questions at all, please as always let us know and The Home Loan Company will be happy to provide you with any assistance you need in comparing home loans and getting the right finance working for you.
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