In addition to these two global factors, region-specific factors have contributed to the recent deceleration in the global economy. The Chinese economy has shown some weakness due to the lingering impact of deleveraging policy measures, together with trade tensions.
The fact that the Bank has offset the effect of higher funding costs on lending rates means that the normal level of the cash rate is lower than it otherwise would have been. A 3 per cent cash rate today is not the same as a 3 per cent cash rate in the past.