PaulandNic

what do you reckon the big 4 will do?

Amazulu

Damn, bad news for me.

GarryP

It's expected they will drop .35%

Personally I wouldn't be surprised to see the RBA drop by another 0.25% next month as well - that would catch people unawares, and would also tie in to the carbon tax startup.

Realistically they need to cut the interest rate to ~0.5% total (similar to the rest of the world) to get the exchange rate in check, whilst keeping mortgage rates high to stop money going into the dead end of property.

jad n rich

Soon it wont be worth having money in the bank, low interest rates minus the tax so money will start to go into property and shares again.

bingobob777

Inflating the bubble even more.

Why are the Australian Govt. making the same mistakes the rest of the world made 3 years ago? Got to protect house prices at all cost, ignore the fact people would have more money to spend if they didn't have to spend an increasingly large amount of their salary on mortgage/rent.

The Squire of Onchan

It's going to go *BANG* very soon ... Property prices cannot be sustained at these levels.

Damson

£ up 2c on $ in 1 day - keep this up (sorry Amazulu!)

quoll

Bugger! Not so good when you have savings but I can imagine it is a load of relief for those with a mortgage.

iamthecreaturefromuranus

Govt didn't change interest rates, the central bank did.

What would you have had them do? House prices are supposedly already falling and cutting interest rates means people with a mortgage will spend less of their salary on it. Doesn't that all fit in with what you want.... or do really want everything to crash, house prices to collapse, peoples life worth wiped out... just so you can say "I told you so"?

jad n rich

Yes lots of people in aus are self funded retirees, due to the asset test on the pension.

I imagine interest rate cuts are very hard when all you have to live on is the interest.

Noticed CUA has 2 years fix term for 5.95% and 1 year for 5.85%, not sure how long those rates will last

Luthien

One of the four will step forward with a press release citing the pressure of international funding costs as a reason for witholding the full cut (not sure whose turn it is this time ). Really need a rolling eyes smilie but I would probably use it too much. Rolleyes.



Ubank is still offering 6.01% / 6 month term deposit for individuals and super funds. I expect that will change soon..

Amazulu

It's not that long ago, until the late '90s at least, that in many western countries, the government set the interest rate and not the reserve bank. Now I'm not saying that we should go back to this as governments used interest rates for political ends (and in the case of the UK, with disastrous results), but a threat of this, along with other measures, might get the banks thinking twice.

GarryP

Well, you can't trust politicians with those reins, because they will play political games to get themselves re-elected.

And you can't trust economists because they have demonstrated they don't actually know what's going on, and will play ideology rather than reality. Oh, and they value money over people, never a good thing.

So, who do you pick with the brains to know what the right move is, and the integrity to do it without fear or favour?

PaulandNic

PaulandNic

.32

http://www.smh.com.au/business/nab-f...502-1xyx0.html

Also hidden at the bottom...

Bank of Queensland cut its standard variable rate by 0.35 percentage points yesterday afternoon.