The Reserve Bank of Australia has cut official rates by 25 basis points to 3.25%, catching a number of economists by surprise. Many had expected the RBA to keep interest rates steady until November. Every November in the past six years the RBA has varied interest rates, but perhaps as a reflection of subdued retail spending this year, they’ve moved a month earlier this year.
A cut of 0.25%, if passed on by the banks, could save a family almost $50 a month for a mortgage of $300,000 over 25 years. It is also hoped that it may boost business confidence to invest in capital equipment and infrastructure.