What affect does low inflation have on your household or business?
Well first, lets see what the Australian inflation figure is today, wow, 1% per annum, yes, the lowest since 1999.
I remember when inflation was 10%
When it was 10% the Reserve bank raised interest rates and at one stage we were paying 18-20% – who else remembers?
But right now, the Reserve Bank is considering lowering interest rates, in order to boost spending and boost growth in the Australian economy.
This is good for all of us with DEBT.
But not too good for retirees or people relying on investment income from their banks to pay for normal living expenses and outgoings.
When the 1% figure was announced over 60% of economists in Australia believe the Reserve Bank would lower the cash rate by 0.25%, but only yesterday (July 28th) news came out that finally the U.S.A was going to RAISE their interest rates.
What does this mean for their economy?
Well this means their economy is on the up, and when the USA coughs, Australia has a sneeze, now only 40% of Australian economists believe the Reserve Bank will lower rates next Tuesday.
So keep your ears open- what will the Reserve Bank decide next Tuesday afternoon?
What do you think?
So the cost of debt may come down next Tuesday, if this happens what can you do that will help your home and/or business cash flow?
Ring a credit (debt) advisor, consolidate – refinance your higher interest rate debt to a lower rate.
Until Next Time,