Some expect one more cut of as little as a quarter of a percentage point, while others predict that it could be up to 1 per cent. The housing industry, business and farming groups welcomed the cut, claiming that last year's rate rises had taken a toll. At the time there was evidence to indicate that the Reserve Bank didn't need to tighten as far and as fast as it did. There was no sign of wages inflation, the dollar, despite its weakness, was not fuelling inflation with high import prices, and businesses had not been increasing profit margins, Mr Matthews said. I think they're still pretty concerned about the growth outlook.
Inflation is very much last year's problem.
This year's problem is growth and that means further interest rate cuts.