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What today’s interest rate cut means for Australians

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The Reserve Bank of Australia (RBA) has slashed the cash rate to a historic new low.

The RBA cut the cash rate from 0.25 per cent to 0.10 per cent.

It comes after two other interest rate cuts this year.

PwC’s Chief Economist, Jeremy Thorpe, says it’s the smallest rate cut ever in percentage terms, but it’s significant.

“I don’t think this is going to provide a lot more stimulus,” he told Ross and Russel.

“Obviously (it’s) supporting business to borrow.

“The hidden thing here also is trying to keep the Australian dollar down. If we can lower the dollar and make all our exports more competitive then that’s one way we can grow and it will create jobs as well.”

Mr Thorpe says the rate drop will be good news for home owners, but bad news for those looking to enter the housing market.

“It … means that house prices, or house demand, is probably going to keep going,” he said.

“We’ve already seen unit prices in the last month increase in Melbourne, and we’ve seen house prices generally around the country increase.

“This is going to put more pressure upward on house prices.

“If you own a house, it’s great.”

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