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Reserve rate cut anticipated

Posted by: 2UE | 25 January, 2012 - 2:01 PM
Banks dropping their fixed interest rates, will RBA be next?

The Reserve Bank is expected to cut interest rates next month in a bid to boost spending, as latest figures show inflation is under control.

Consumer prices remained steady in the three months to December for an annual inflation rate of a little over 3%.

The cost of taking a domestic holiday the rose most over the quarter, followed by higher rents and petrol prices, but the cost food and cars has come down.

Ben Jarmin from JP Morgan says the latest inflation figures aren't really that surprising, and it will be the state of the international economy that will drive the next interest rate decision.

 

 

Lower fruit and vegetable prices helped keep inflation under control, its also been cheaper buy a new car.

The Reserve Bank will take today's soft infaltion figures into account when considering next month's interest rate move. Most economists are tipping rates will fall at least another quarter of a per cent.


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