Jobs figures may prompt another interest rate cut

New statistics show that more than 15,000 jobs were lost in February, which may prompt the Reserve Bank of Australia (RBA) to introduce an extra interest rate cut.

Levels of unemployment grew by 0.1 per cent during the month and economists have now predicted further adjustments to the cash rate.

Chief economist Paul Bloxham has warned that the economy has been under stress recently and the "door is open" for further cuts.

The RBA decided not to change the cash rate in February and March, having made cuts totalling 0.5 per cent in November and December 2011.

Many banks saw this as an opportunity to raise the rates on their mortgages, although they have generally been reluctant to do the same for term deposits and savings accounts.

"We think there will be a rise in the unemployment rate in the new year (2012) but this will be a key motivation for the RBA to cut rates," Mr Bloxham commented.

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