Australia central bank cuts rates to record-matching lows

With rates near zero in the United States, Japan and Britain, those countries have taken ever more exotic stimulus steps including buying massive amounts of government debt.

And, as yet, lower rates have had only a limited impact on consumers, with retail sales disappointingly flat in October and demand growth for credit the lowest in decades. The housing market has also been less than stellar. The Statistics Bureau on Tuesday reported approvals to build new homes slid 7.6 percent in October, so reversing much of September's hefty 9.5 percent increase.

The impact of lower export prices was clear in Australia's trade deficit, which more than doubled in the third quarter. As a result, the current account deficit widened by a fifth to A$14.9 billion ($15.5 billion), according to figures from the Australian Bureau of Statistics.

Fortunately, export volumes managed to outpace imports and so add 0.1 percentage point to economic growth in the quarter. However, that was more than offset by government penny-pinching as the ruling Labor Party struggles to return the budget to surplus in 2013, years before most other rich nations.

Data out Tuesday showed government spending fell by 2.0 percent in the third quarter, largely due to a big drop in defence investment. That was a steeper fall than many analysts had expected and could take around half a percentage point from economic growth in the quarter.

It was no surprise then that Treasurer Wayne Swan

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