BREAKING NEWS: RBA cuts interest rates by 0.75%

The Reserve Bank of Australia has cut official interest rates by 0.5% to 5.5%, the lowest level since May 2006.

The Reserve Bank of Australia has cut official interest rates by 0.75% to 5.25%, the lowest level since May 2006.

The interest rate cut was widely expected by economists, who say the RBA is more focused on preventing the Australian economy from sliding into recession than fighting inflation, which still sits well over 4%.

The cut will be welcomed by business groups, which have become increasingly worried about a rush poor economic data, including falling house prices, retail sales and business confidence.

A survey of companies in manufacturing, construction and services by the Australian Industry Group found 40% of companies are preparing to slash staff numbers.

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