Australia slashes interest rates

The Reserve Bank of Australia has announced it is slashing interest rates by one per cent in a move designed to boost the Australian economy.

Australia's cash rate has been lowered from seven per cent to six per cent, following a 0.25 per cent reduction in September.

In a statement this morning the bank's governor Glenn Stevens said that the recent financial turmoil and the prospect that inflation will weaken significantly in 2009 warranted a "significantly less restrictive stance of monetary policy".

The decisions taken in the last two months represent a notable shift in monetary policy, with the September cut being the first since December 2001, since when the rate had been raised by 0.25 per cent on 12 occasions.

Such a move could help significantly lower the cost of Australian mortgages, something that may interest those thinking of buying property there.

Financial services firm HiFX recently observed that there has been a "seasonal upturn" in the number of Britons looking to buy homes in Australia and New Zealand.