Today the Reserve Bank of Australia cut interest rates for the first time in almost seven years.
The RBA today said it would lower the cash rate by 25 basis points to seven per cent, from 7.25 per cent, following its monthly board meeting. This cut today by the RBA was very much anticipated from the Financial markets.
Mr Stevens from the RBA board commented that indicators of household spending have recorded subdued outcomes over recent months as credit expansion to both households and businesses has slowed.
Mr Stevens noted that fixed-investment spending by businesses continues to be very strong.
"At the same time, high prices of oil and a range of other commodities have added to global inflationary risks," he said.
The RBA today certainly has left the prospect of more rate cuts to come open. The overall impact of higher fuel costs and tougher economic factors have certainly been the main factor in the RBA cutting interest rates today.