Interest Rates Cut

The Reserve Bank of Australia has cut interest rates by 0.25%, dropping the official cash rate to 4.1%.

It is the first rate cut since November 2020.

The RBA says inflation has continued to ease, and underlying inflation is expected to return to its target 2% to 3% range sooner than it expected.

“Both headline and underlying inflation have come down, partly because interest rates are slowing some areas of the economy,” it says.

Although the RBA says inflation has fallen it recognises there are still many households under financial pressure.

And it says the outlook is still uncertain.

“Wage pressures have eased a little more than expected, housing cost inflation is abating and businesses in some sectors continue to report that it has been hard to pass on cost increases to final prices.”