For the first time, the Reserve Bank of Australia has dropped its official cash rate below one per cent.
The cut of 25 basis points to 0.75 per cent is the RBA's third cut since June.
It comes as jobs data show the unemployment rate rose to 5.3 per cent from 4.9 per cent at the start of the year.
The RBA hasn't ruled out further cuts.
It says it's "prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time."
AMP Capital’s chief economist Shane Oliver is expecting more cuts.
"We're of the view that these interest rate cuts (and) the tax cuts, they’ll provide some help, but not enough to get growth around the levels the Reserve Bank wants to see. So, they'll have to do more. Ultimately, that involves taking the cash rate down closer to zero. We don’t think they’ll go to zero and we don’t think they will go negative. If anything, negative interest rates would be a negative for confidence. Negative interest rates also put pressure on bank profit margins."
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