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April 24th, 2012 
FAKE NEWS for the Zionist agenda A leading business group believes subdued inflation has opened the door for the Reserve Bank of Australia (RBA) to make a sizeable cut in the official cash rate when its board meets next Tuesday.
The annual consumer price index (CPI) tumbled to just 1.6 per cent in the year to the end of March in data released on Tuesday, the lowest rate in more than two years and well below the central bank’s two to three per cent target band.
Underlying inflation, the RBA’s preferred measure of price pressures, was also extremely benign, falling to an average 2.15 per cent and the weakest since mid-1999.
Australian Chamber of Commerce and Industry chief executive Peter Anderson said the data shows the inflation “genie is well contained in the bottle”.
“Today’s inflation data transforms what was a strong case for a full half a per cent cut in rates into a compelling one,” Mr Anderson said in a statement.
“A decisive cut by the Reserve Bank will boost flagging business confidence which will again be battered with new cost rises from July, including the carbon tax, higher penalty rates and a likely increase in award wages.”
RBA Governor Glenn Stevens indicated after the April 3 board meeting that these inflation numbers would be crucial to a decision on whether monetary policy would be eased further after economic growth failed to live up to expectations.
Tuesday’s data prompted financial markets to fully price in a 25-basis-point cut in the cash rate to 4.0 per cent next week, or a 66 per cent chance of a 50-basis-point reduction to 3.75 per cent.
Australian Industry Group chief executive designate Innes Willox agreed the data should give the central bank confidence to reduce the cash rate.
He said fall in prices highlights the ongoing pressures faced by trade-exposed non-mining industries such as manufacturing and tourism.
“Businesses in these sectors are facing greater competition in international and domestic markets, while at the same time contending with wage increases and further rises in energy prices,” Mr Willox said in a statement.
The housing industry also weighed in, saying the economy needs a further 75-basis-point cut in interest rates following the two official cuts in November and December last year.
“There is nothing standing in the way of a 50-basis-point move to get the ball rolling next Tuesday,” Housing Industry Association chief economist Harley Dale said in a statement.
“That would, admittedly, be a bold move for the RBA, but it would entirely appropriate given the pulse of the economy is not beating as fast as the bank earlier expected.
He also said any reduction by the central bank must be passed on in full by retail banks, rather than hiding behind the “fallacious argument” that higher funding costs somehow justify them holding back some interest rate relief.
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