Banking

The September CPI figures show the Reserve Bank doesn’t need to worry about inflation getting out of control in the near future.

This should lead to a cut in official interest rates tomorrow as a means of building a safety net against economic shockwaves from Europe and the US.

With official rates of most other developed countries below one per cent against out 4.75 per cent, there is certainly a lot of room to move.

The only worry now is whether the banks will pass on any rate cut to their borrowers. There is some speculation they will keep all or part of the advantage. It won’t be a good like as a number of the major banks are reporting their profits which are likely to be pretty good.