HSBC anticipates rate cut tomorrow

The cash rate is likely to be cut by another 25 basis points when the Reserve Bank of Australia's (RBA) monetary policy committee (MPC) meets tomorrow (February 7), according to HSBC.

The bank asserts that with inflation "comfortably in the target band", the Reserve Bank is well-positioned to reduce the cash rate even further, following consecutive cuts of 25 basis points in November and December last year.

Tomorrow's meeting is the first to be held in 2012 - the MPC does not meet in January due to the summer break - and HSBC economists suggest that a rate cut is a wise course of action in the face of an "easing labour market" and the European financial crisis.

A cut of 25 basis points could be a sign of further things to come, the bank added, anticipating two further cut to be made during the first half of 2012.

Previous cuts to the cash rate were hailed by industry bodies as beneficial, with Real Estate Institute of Queensland managing director Dan Molloy stating in December that they will go a long way to restoring consumer confidence in the market.

Anyone planning a Brisbane property investment may be boosted by further rate adjustments, which could help to restore buyer confidence in the long term.