The Reserve Bank has cut the cash rate to 4.1% with a quarter-point reduction, offering a reprieve to indebted households buffeted by years of high living costs and elevated mortgage repayments.
The decrease is the first since the early days of the Covid-19 pandemic, and has arrived just in time for the Labor government to campaign on its economic credentials before an election to be fought on cost-of-living policies.
Economists view the decision as a sign that Australia’s central bankers believe inflation is being tamed.
Lenders had been dropping their borrowing rates in anticipation of a cut, and should now flow through in full to mortgages.