This decision was taken to support the economy by boosting demand and to offset the tightening in financial conditions that otherwise was occurring. The reduction in the cash rate at the March meeting was passed in full through to mortgage rates. The cash rate has been reduced by 100 basis points since June.
It also means that economic sectors must be sufficiently competitive to be able to operate within the single market. An indicator of such competitiveness is provided by trade relations with the European Union. Over the past ten years, these relations have tightened considerably.