Weekend Economist: Basis to cut

The Reserve Bank has always stressed more rate cuts could come if necessary. If things keep going as they are now, we'll be there by February.

We have revised our interest rate outlook. We still expect rates to be on the rise in 2016 as the world economy gathers considerable momentum but we now expect the Reserve Bank of Australia to cut rates further in the early months of 2015 in an effort to bolster domestic demand and lower the Australian dollar before evidence around the world economy becomes clearer around the middle of the year.

We expect a 25 basis rate cut at the February board meeting and another one to follow in March.

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