Big rate cuts due this week
The Reserve Bank is expected to cut interest rates by at least 0.75 per cent tomorrow as expectations rise of zero or even negative economic growth in the Australian economy. A cut of 0.75 percentage points to 4.5 per cent would cut another $150 off monthly repayments on a $300,000 mortgage, if fully passed on to borrowers by the banks and lenders. Futures markets have priced in expectations of further cuts to bring the official cash rate down to three per cent by March. Total savings to borrowers with $300,000 mortgage since rates peaked in August are about $530 per month. September quarter growth figures are due out on Wednesday with most analysts tipping growth of between zero and 0.2 per cent. The Treasurer Wayne Swan said yesterday that the government would be announcing further stimulus spending before Christmas and may bring forward tax cuts due to be delivered next June.
Source: The Age