Thursday, December 8, 2011

Big four banks remain silent on handing over rate cut as Europe crisis simmers

The big four banks boast about their individuality, their market competition and care for customers yet so far all have decided not to react to Tuesday's Reserve Bank cut to official interest rates.

Instead they're sitting on their hands and not announcing whether they will pass on all or even part of the rate reduction.

The last rate cut came on Melbourne Cup day and it saw the banks react within minutes.

But the latest announcement of a 0.25 percent fall in the cash rate was followed by silence.

Bank customers have been left in the dark. Someone with a $200,000 mortgage stands to save $32 a month if the reduction is delivered in full.

The AM program hit Sydney's Martin Place to gauge the view of borrowers and I put the local anger in context with the looming debt crisis in Europe.

Listen to it here.

As the banks remain in damage control, there's been surprisingly good news on the strength of the Australian economy.

According to the Bureau of Statistics, September quarter growth rose one percent and 2.5 percent year on year.

The gains were fuelled by mining, construction and a rise in consumer spending.

Here's my analysis from The World Today.

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