The Reserve Bank has cut interest rates by .25% and won community applause for the decision.
The RBA's statement about the cut mentions a slowdown in Chinese growth, uncertainty over Europe and says "cautious behaviour by households and the high exchange rate have had a noticeable dampening effect" on Australia's economy as factors that influenced its decision.
Several banks have already said they will pass on the cut as soon as possible. The Commonwealth Bank immediately announced its intention to pass on the cut and My Business understands Westpac has already said it will do likewise. Newcastle Permanent Building Society rocketed its announcement about a rate cut into our inbox 14 minutes after the RBA announcement.
Australian Retailers Association Executive Director Russell Zimmerman, who has been pressing hard for a rates cut for several months, said the cut will mean “well- deserved and long- awaited hope over the festive season” for retailers.
“The retail industry may have been saved in the nick of time from a disastrous Christmas, and can now be more confident Santa is coming to town and trade will be enjoying at least a short term boost over the festive season.
“The RBA has made consumer relief from mortgage stress and the soaring cost of living a safe bet, and this will hopefully resonate through the sector, meaning positive things for growth and employment.”
The property industry is happy about the cut. With Ray White Group Chairman Brian White issuing a statement in which he said "We have now been discussing a possible rate increase for nearly two years as a nation. It has clearly been inhibiting the psyche of some potential buyers and sellers who have lacked the economic confidence to make decisions about property transactions in that period.”
"There are many people on the sideline who have been awaiting a more favourable cash rate before engaging in the market and this, in turn, has been impacting other sectors of our economy."