RBA cuts rates to 1.25%
An interest rate cut was all but ensured by the RBA Governor Phillip Lowe when he spoke at the Economic Society of Australia in Brisbane last month, noting the RBA board was considering the case for lower interest rates.
In May, the RBA board discussed a scenario in which there was no further improvement in the labour market and the unemployment rate remained around the 5% mark. In this scenario, they judged that inflation was likely to remain low relative to the target of 2-3% and that a decrease in the cash rate would likely be appropriate.
The RBA has now delivered, by cutting the official cash rate by 0.25% to 1.25%, the first move in rates since August 2016.