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The Forum > Article Comments > Time to cut RBA rates, but easy does it > Comments

Time to cut RBA rates, but easy does it : Comments

By Henry Thornton, published 2/9/2008

Slowing economies and inflation at uncomfortable levels are worrying central bankers around the world.

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I'm with you Henry. In fact, I don't think there's much of a case for an interest rate cut at all. Ed Shann's article in today's AFR makes a lot of sense. Business investment is growing; inflation is still high; and while the eastern states will suffer some increase in unemployment, skill and labour shortages are likely to persist in the growth states. Cutting interest rates in a high inflation environment, while productivity is low, is likely to mean there'll be a need for higher interest rates to choke off rising inflation in the future. That might well mean more pain, affecting more people, for longer.
Posted by Senior Victorian, Tuesday, 2 September 2008 3:08:18 PM
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