Big rate cut coming next week

The Reserve Bank is expected to cut interest rates by 1.0 per cent next week because the latest inflation figures to be released today (Tuesday) are expected to show that consumer prices fell for the first time in more than two years. The latest CPI data from the Australian Bureau of Statistics is expected to reveal that prices fell by 0.4 per cent on average in the three months to December 31. Commonwealth Securities chief economist Craig James said a rate cut of at least 0.5 per cent was guaranteed. Since September, the RBA has cut the official cash rate by 3 percentage points to 4.25 per cent.

Source: The Australian