Slow inflation 'creates room for interest rate cuts'

It seems that further cuts to interest rates in early 2012 are a mere formality, as new figures have shown that inflation slowed down towards the end of 2011.

In the 12 months leading up to September, annual inflation was down from 3.5 per cent to 3.1 per cent, according to the Australian Bureau of Statistics.

Having analysed the findings, Treasurer Wayne Swan said that home loan customers should see rates fall even further next month.

He added that interest rate cuts would be extremely welcome, as many households are struggling to cope with increased energy bills.

"With underlying inflation sitting squarely in the Reserve Bank of Australia's target band, [this] does create room for further interest rate cuts," he commented.

Yesterday (January 25th), the Australian Associated Press reported that leaders at the Australian Chamber of Commerce and Industry had warned the country's major banks that they must pass on any interest rate readjustments made by the RBA to the Aussie on the street.
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