The RBA has announced its third rate cut for the year, slashing an already historically low interest rate.
Despite cutting rates to 1.25 per cent in June, the RBA still considers further economic stimulus is required, having then moved the official cash rate to 1.00 per cent in July and again to 0.75 per cent today.
Top market and economic experts were not surprised with today’s move following higher than expected unemployment figures.
In the lead up to today’s decision, comparison site Finder had surveyed 45 of the nation’s leading economists and commentators with one in three expecting rates to fall to 0.50 per cent by mid next year.
Five economists expect the rate to go all the way to 0.25 per cent with one predicting rates fall to 0 per cent.
The majority of the nation’s top economists expected today’s announcement, with Mortgage Choice’s Susan Mitchell believing the latest economic data suggested a cut.
“The August labour force data revealed an increase in the unemployment rate, as well as an increase in the underemployment rate, which is now in line with its recent peak,” Ms Mitchell said.
“National accounts data released after the September monetary policy meeting revealed that the economy grew below what the RBA had forecast a month earlier.”
Savings for investors
Insights manager at Finder, Graham Cooke stipulates borrowers will win at the expense of savers.
“If the cash rate drops to 0.75 per cent, and your lender were to pass on the cut in full, an average mortgage holder could save $19,000 over 30-years on their mortgage,” Mr Cooke stated before today’s announcement.
Sensational news!!! The lower the better for my mortgage 🙂
Bad for some, good or others 🙂 Deal with it…
Absolute idiots at the RBA. Subservient idiots. This is negative for our economy, can’t they see this? Don’t they care they are killing pensioners and savers? Where is a primary kid’s incentive to save with a bank now? Or a high school kid for that matter. Mt real concern is for the pensioners. These elite in their ivory towers care NOT for real people and don’t deserve a fraction of the pay that they reap from taxpayers! They should be ashamed of themselves. How DARE they do this to pensioners and savers! They are working for US not their politically convenient masters.
And they wonder why people are struggling to save for their first home when you can’t get any return on your capital in the safe cash market. There shouldn’t have been a drop in rates they are too low. They would actually get a better result out of increasing them so that savers can get a return and enter the market.
Just how bad is the economy going! But this cut will do nothing to help.