Property experts eye 100 point cut
In a survey carried out by the Australian Associated Press ahead of the announcement next Wednesday (February 4th), all 17 respondents said they are anticipating a cut, with the majority banking on a full percentage point reduction.
Such a manoeuvre would take the base rate to 3.25 per cent, its lowest level since 1964.
As the country stands on the brink of its first recession in 18 years, UBS economist George Tharenou told the news agency that the RBA is likely to continue hacking away at the rate as 2009 gets into full swing.
“We have taken the view that global deflation is more of a threat in 2009 than the early 1990s recession,” he said.
At its last meeting in December, the RBA decided that a 100 basis point cut was necessary to support the economy, paving the way for a raft of new low-interest home loans.