A rate cut won’t spur new investment to lift the economy

Even if interest rates were 25 or 50 basis points lower, there would be few business capital investments ready to roll.

Falling bond yields around the world show that investors expect the malaise that has depressed ­investment and growth since the global financial crisis will ­continue through the year and ­beyond.

Investors in Australian government bonds last week were ­accepting an after-inflation return of just 0.15 per cent over 10 years, assuming the Reserve Bank hits its inflation target of 2.5 per cent.

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