Christmas rate cut just in time
THE Reserve Bank of Australia has slashed the cash rate by 25 points - and it could not have come at a better time.
With the lead up to Santa's arrival, families can have some of their confidence restored and a little extra cash in their pockets.
The rate was reduced to 4.25% effective today and came as the European economy significantly slows.
President of the Warwick Chamber of Commerce David Littleproud said the pre-Christmas boost is a good step for consumers.
"There's been a lack of confidence in the government so this will definitely go a long way to help," Mr Littleproud said.
He said the cut will encourage people to spend rather than save every penny.
"Conditions have been tight and people are saving rather than spending, but it's imperative that people spend this cut locally," he said.
Owner of J Lyns hair Studio on Grafton St Candy Turner said the cut has come at a right time.
"It's about time banks started helping out small local businesses," Ms Turner said.
"Everyone can have a bit more money because it's been so tight lately and it takes some stress off families."
National Retail Association executive director Gary Black said recent retail trade figures pointed to a slight but very welcome recovery for retail, following two years of difficult trading conditions.
"In the lead-up to Christmas retailers are very much looking for a boost to consumer spending in those discretionary areas and a rate cut is just what they needed," Mr Black said.
"This announcement by the RBA will boost retailers' hopes of a strong Christmas and New Year trading period, and a better 2012," he said.
The Bank of Queensland announced yesterday it will pass on the rate cut to customers and Chief Executive Officer and Managing Director Stuart Grimshaw said the decision was the "right thing to do."
"Our cost of funds do continue to increase so pricing remains a balancing act of shareholder and customer interests, but with Christmas less than three weeks away, we know our customers will appreciate the extra dollars in their wallet as they head in to Christmas celebrations and family holidays," Mr Grimshaw said.
BOQ will cut its standard variable home loan by 25 points as of 16 December, bringing its standard variable rate home loan to 7.36% p.a.
WHAT THE CUT MEANS FOR YOU