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Ongoing deterioration in economic conditions will see another 25 basis points come off the cash rate in April according to Westpac.
Released yesterday, the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, fell 0.2 per cent in January to -3.1 per cent.
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Although this is the weakest reading the Index has registered since August 1990 when the economy had already entered a deep, long-lasting recession, Westpac said aggressive policy measures from the government and RBA would prevent the economy from a repeat of the 1990s experience.
The RBA will reduce the cash rate by another 25 basis points to 3 per cent when it meets next month, Westpac forecast, with the cash rate moving to 2 per cent within the second half of the year.
