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Reserve Bank to cut official interest rate to 1.25pc in 2016, says CBA

Jacob Greber
Jacob GreberSenior correspondent
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Commonwealth Bank of Australia has become the first of the big four banks to predict another two official Reserve Bank of Australia interest rate cuts in 2016, which would take the cash rate to 1.25 per cent.

While CBA's chief economist Michael Blythe has questioned the Reserve Bank's pessimistic forecasts for inflation over the next two years, he said the reality is that recent price data has "shocked the RBA and contributed to a fundamental reassessment on how policy makers are thinking about inflation.

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Jacob Greber writes about politics, economics and business from Canberra. He has been a Washington correspondent and economics correspondent. Connect with Jacob on Twitter. Email Jacob at jgreber@afr.com

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    Original URL: https://www.afr.com/news/economy/reserve-bank-to-cut-official-interest-rate-to-125pc-in-2016-says-cba-20160512-gou2a8