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Leading index points to rate cut in April

by Staff Reporter7 minute read

Ongoing deterioration in economic conditions will see another 25 basis points come off the cash rate in April according to Westpac.

Released yesterday, the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, fell 0.2 per cent in January to -3.1 per cent.

Although this is the weakest reading the Index has registered since August 1990 when the economy had already entered a deep, long-lasting recession, Westpac said aggressive policy measures from the government and RBA would prevent the economy from a repeat of the 1990s experience.

The RBA will reduce the cash rate by another 25 basis points to 3 per cent when it meets next month, Westpac forecast, with the cash rate moving to 2 per cent within the second half of the year.



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