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Forget pitchforks and flaming torches, banks won't pass on cuts

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24.06.2019

It might be time to put down the pitchforks and flaming torches.

The angry mob, usually led by the treasurer of the day, that gathers whenever one of this nation's banks does something wrong is soon to face a crisis of its own making.

Reserve Bank of Australia governor Philip Lowe has made it pretty clear rates are going to keep on falling.Credit:Alex Ellinghausen

Yep, it's difficult to feel any sympathy for the nation's banks. The next run of blockbuster films is surely going to feature Australian bankers as the black-hatted and black-hearted villains who would give Cruella de Vil a run for her money.

But the way official interest rates are falling means the national economy may be about to answer that great philosophical question: what happens when an unstoppable force meets an immovable object?

The unstoppable force here is the fall in official interest rates.

At 1.25 per cent, the official cash rate has never been lower and Reserve Bank of Australia governor Philip Lowe has made it pretty clear it is going to keep on falling. The aim is to get the economy moving along at such a clip that the unemployment rate sinks somewhere south of 4.5 per cent.

Hence........

© Brisbane Times