As Melbourne’s heat wave continues to soar - 44 degrees yesterday or almost 120 F in the old scale - I thought that you may find this article of interest… enjoy and look forward to investing another year together.
A massive fall in petrol prices has pushed the cost of living down for the first time in two years and opened the way for interest rates to fall to as low as 2 percent.
Petrol prices fell by more than 18 percent in the December quarter as unleaded petrol fell from around $1.50 per litre in September to close to $1.00 per litre in December, mirroring falling oil prices.
According to official figures released today, the consumer price index – which tracks the cost of living in
Australia – fell by 0.3 percent in the December quarter.
Over the 12 months to December, the CPI rose by 3.7 percent, well below its previous reading of 5 percent. The fall in the cost of living - which is the fastest decline logged in 10 years - is expected to open the way for further rate cuts from the Reserve Bank of Australia (RBA), starting with its first meeting of the year, to be held next week.
Economists expect the RBA to trim the cash rate by 75 basis points, a move that would take the cash rate to 3.5 percent. “There’s nothing of concern in these figures for the Reserve Bank that will stop it aggressively cutting interest rates next week,” Riki Polygenis, economist at ANZ Bank told ninemsn. She believes rates will fall by 75 basis points next week and will eventually fall to 2.5 percent this year. Several hours after the figures were released, Westpac economists lowered their forecast for official interest rates to fall to 2 percent this year.
The bank is also predicting a rate cut of 1 percent when the RBA meets next week. While the fall in prices and interest rates may be good news for consumers, other economic figures released today showed a sharp slowdown in economic activity. The Westpac/Melbourne Institute index of economic activity - which tracks the likely pace of economic growth in the future - contracted by 2.2 percent in November, and analysts said it showed that the odds of
Australia entering a recession this year are shortening. “With the –2.2 percent growth rate for November we are now reporting the first negative reads for growth since May 2001,” said Bill Evans, Westpac’s chief economist. “In the past this has been a useful signal of the likelihood of Australia experiencing a recession.
Meanwhile, car audio retailer Strathfield has become the latest victim of the economic downturn. The company, which has 100 stores across
Australia, has been placed into voluntary administration after weak Christmas trading. It is believed the company will now look to pursue a franchising business model in a bid to survive.
Source - ninemsn Money 28/01/2009 12:00:00 PMRemember Live with Passion
Yours with Ethics and Passion George Mihos,
Melbourne
Australia,
January 29, 2009
Bookmark & share this post with others! Each of these icons link to social bookmarking sites where readers can share and discover new webpages...
Peak Performance, George's Quote of the Day, Super, Tax, Financial Intelligence, Business, Associates, Property, Shares, Joint Ventures, General
Did you enjoy this post? Why not leave a comment below and continue the conversation,
or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment