Tuesday, April 24, 2012

Cash rate cut almost certain after consumer inflation slows dramatically

Official interest rates are almost certain to be cut next week after official consumer inflation slowed dramatically.

According to the Bureau of Statistics, the Consumer Price Index rose by just 0.1 per cent in the March quarter, making 1.6 per cent for the year.

The evidence that inflation is now less of a worry than the multi speed economy is expected to prompt the first official rate cut since December.

The question is now whether the RBA will cut by 0.25 percent or 0.5 percent to stimulate struggling sectors, some of which are in technical recession.

Here's my analysis from The World Today.

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