RBA cuts interest rates for the first time since August 2013

The latest interest rate cut takes the cash rate down to 2.25%, with the decision largely based on the current lacklustre Australian economic environment.

There are good reasons for the RBA interest rate cut, and all signs are pointing to a further cut in the near future:

- Growth is too low, running at around 2.75% last year and inflation is benign

- Unemployment has increased

- Iron ore and energy prices have collapsed

- Consumer confidence has remained poor since the 2013 Federal election

- Consumers are more focused on paying down debt; and

- Wages growth has fallen to a record low

It is expected that another 0.25% cut will occur, taking the cash rate to 2% in the months ahead.

Click here to read the reasons for optimism and implications for investors, and how to manage your investments at this time. Or get in touch to chat about the changes here.