Rates: Falling inflation gives banks room to cut deposit rates

Banks have an opportunity to cut deposit rates again this month after inflation fell to a three-year low in August.

14th September, 2013

Banks have an opportunity to cut deposit rates again this month after inflation fell to a three-year low in August.

The consumer price index rose by just 0.2 per cent last month from August 2012, meaning prices have been generally flat for the last year. It follows two consecutive months where annual inflation was just 0.7 per cent.

The unusually low numbers give banks headroom to cut deposit rates without affecting real returns after inflation and taxes are...

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