The RBA announced their fifth rate cut in 12 months. A further official cash rate cut of 0.25% lowers the official rate to 3.25%p.a., the lowest in three years.

Although this move that will be welcomed by borrowers, the cut is in response to a worsening outlook for the global economy and signs of a weakening local labour market.

With inflation expected to remain within the RBA’s target range of two to three per cent next year, RBA governor Glenn Stevens said that they could afford to respond to the weaker growth outlook.