Reserve meets as economy stumbles

Canberra Times Monday 4th July, 2011

The Reserve Bank meeting today to discuss interest rates comes amid surprisingly weak economic data that could lead to a change in thinking among board members.Economists do not believe interest rates will go up today, as consumers reign in spending and inflation is subdued. However, alarm that the housing industry is going sideways, with prices falling and building approvals down again, is provoking speculation the next rate rise could be put off or that rates could be cut in the near future. Retail spending recorded an unexpected drop of 0.6 per cent in May, according to the Australian Bureau of Statistics.Council approvals to build new homes fell 7.9 per cent in May, the fourth fall in five months. Excluding Queensland, where flood reconstruction is underway, national approvals fell by ...

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