Rates to fall to three per cent
National Australia Bank is now predicting interest rates will fall further than previously expected early next year. Markets are pricing in rate cuts of 1.5 per cent by March 2009, from the current setting of 4.25 per cent. Economists say that the worsening global economy will force the Reserve bank to cut rates more aggressively than previously anticipated. RBA minutes released yesterday indicate the governor of the RBA, Glenn Stevens is determined to stay ahead of the economic downturn. The Australian Bureau of Statistics yesterday released figures showing new housing starts had fallen more than 10 per cent in the September quarter.
Source: Herald Sun