The Reserve Bank has lowered its inflation and growth forecasts for the first half of 2012, saying the outcome of the European debt crisis is the key downside risk to the Australian economy in its latest statement on monetary policy.
Inflation is now expected to be 0.25 basis points lower than previously, at 2.25%, while GDP in the year to June is expected to be 3.5%, down from 4%.
The statement comes just days after the RBA decided to keep interest rates on hold given the more optimistic outlook coming out of Europe and the United States.
The board wrote in its statement that the central outlook for the global economy assumes a continuation of uncertainty, but it also "assumes that a disorderly outcome is avoided".
"There have been some positive developments over the past six weeks or so, including the agreements made at the Euro Summits in early December and late January as well as the European Central Bank's extension of three-year funding to banks".
However, there is also some uncertainty surrounding the growth outlook due to structural change in the economy. The board notes there is continued evidence this shift is occurring, with more subdued conditions in the tourism and manufacturing sectors.
However, strength in mining should keep growth at trend.
"Some modest easing in domestic cost pressures, including from stronger productivity growth in the domestically oriented services sectors, is likely to be required in the medium-term."
"Inflation could be expected to be higher than in the central scenario if this easing in cost pressures does not occur."
Lachlan Murdoch named as new Ten chairman
Lachlan Murdoch has been named as the new chairman of Ten Network Holdings, in a move that will replace current chairman Brian Long.
The move comes after a number of changes to the company's board.
"As chairman, Brian (Long), instigated improvements in Ten's board governance processes," Murdoch said in the statement. "These processes will continue to ensure good governance and transparency in management."
The company also named James Warburton as the company's new managing director. Long also said Murdoch has proven himself with extensive media experience.
"The board believes that the combined media capability of James Warburton as Ten's chief executive officer and Lachlan Murdoch as non-executive chairman provides the best opportunity for value creation for all shareholders," he said.
Shares flat after weak overseas leads
The Australian sharemarket has opened flat after weak leads from overseas markets, although the United States' market rose just slightly after Greek leaders agreed to budget cuts.
The benchmark S&P/ASX200 index was down 13 points or 0.3% to 4269.8 at 12.00 AEST, while the Australian dollar has fallen to $US1.07c.
In the United States, the Dow Jones Industrial Average rose 6.5 points to 12,890.
James Hardie wins tax dispute
James Hardie has won more than $300 million after a dispute with the Australian Taxation Office.
The High Court has dismissed the ATO application for special leave to appeal a former Federal Court decision that ruled in favour of the company. The dispute has been ongoing since 2006.
According to AAP, the ATO will be obligated to provide $248 million plus interest, with some legal costs to be paid by the ATO.