Mortgage holders will have their fingers crossed today for the first interest rate cut in nearly seven years.
The Reserve Bank of Australia (RBA) is widely expected to reduce the official cash rate to 7 per cent from 7.25 per cent this afternoon after its monthly board meeting.
The cut is anticipated despite data yesterday showing strong company profits.
Profits soared to $57.5 billion in the three months to June, in stark contrast to a string of recent surveys saying business confidence was slumping.
Analysts still expect the rate cut to go ahead, but are doubtful about there being a series of cuts continuing into next year.
Federal treasurer Wayne Swan called on retail banks to pass on to borrowers any official rate cut.
Mr Swan says there's no reason for the banks not to immediately follow suit.
“I expect banks to do the right thing when rates were going up – they passed them on in a nano second, and when rates come down we expect them to bring them down in reasonable time.”
Opposition Leader Brendan Nelson, meanwhile, raised eyebrows by suggesting the RBA could make a half a percentage point cut.
Dr Nelson said while it was unusual for him to make such a call, the economy was facing extraordinary circumstances.
"Somebody needs to say it," he told ABC TV last night.