BREAKING NEWS Westpac delivers good news to millions of Australians with a mortgage - as banks continue to cut rates
One of Australia's Big Four banks Westpac is now forecasting two extra interest rate cuts.
Westpac chief economist Luci Ellis, a former assistant governor of the Reserve Bank of Australia, is now forecasting four more rate cuts, starting in August.
This would take the RBA cash rate down to 2.85 per cent for the first time since December 2022, from the existing 3.85 per cent level.
Slower economic growth could even force the RBA to cut rates more aggressively.
'The risks remain on the downside,' Ms Ellis said.
'It is possible that some of these cuts come a bit faster than the "cautious" path we currently have pencilled in.
'This will depend on the evolving data flow, particularly for the labour market and inflation, as well as the RBA's evolving beliefs about what constitutes full employment.'
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BBC News
2 hours ago
- BBC News
Aukus: Could Trump sink Australia's submarine plans?
Australia's defence minister woke up to a nightmare earlier this week - and it's one that has been looming ever since the United States re-elected Donald Trump as president in November.A landmark trilateral agreement between the US, UK and Australia - which would give the latter cutting-edge nuclear submarine technology in exchange for more help policing China in the Asia-Pacific - was under White House said on Thursday it wanted to make sure the so-called Aukus pact was "aligned with the president's America First agenda".It's the latest move from Washington that challenges its long-standing friendship with Canberra, sparking fears Down Under that, as conflict heats up around the globe, Australia may be left standing without its greatest ally. "I don't think any Australian should feel that our ally is fully committed to our security at this moment," says Sam Roggeveen, who leads the security programme at Australia's Lowy Institute think tank. A pivotal deal for Australia On paper, Australia is the clear beneficiary of the Aukus agreement, worth £176bn ($239bn; A$368bn).The technology underpinning the pact belongs to the US, and the UK already has it, along with their own nuclear-powered subs. But those that are being jointly designed and built by the three countries will be an Australia, this represents a pivotal upgrade to military capabilities. The new submarine model will be able to operate further and faster than the country's existing diesel-engine fleet, and allow it to carry out long-range strikes against enemies for the first is a big deal for the US to share what has been described as the "crown jewel" of its defence technology, and no small thing for the UK to hand over engine blueprints arming Australia has historically been viewed by Washington and Downing Street as essential to preserving peace in the Asia-Pacific region, which is far from their own. It's about putting their technology and hardware in the right place, experts when the Aukus agreement was signed in 2021, all three countries had very different leaders - Joe Biden in the US, Boris Johnson in the UK and Scott Morrison in Australia. Today, when viewed through the increasingly isolationist lens Trump is using to examine his country's global ties, some argue the US has far less to gain from the Secretary of Defence Policy Elbridge Colby, a previous critic of Aukus, will lead the White House review into the agreement, with a Pentagon official telling the BBC the process was to ensure it meets "common sense, America First criteria".Two of the criteria they cite are telling. One is a demand that allies "step up fully to do their part for collective defence". The other is a purported need to ensure that the US arms industry is adequately meeting the country's own needs Trump administration has consistently expressed frustration at allies, including Australia, who they believe aren't pulling their weight with defence spending. They also say America is struggling to produce enough nuclear-powered submarines for its own forces."Why are we giving away this crown jewel asset when we most need it?" Colby himself had said last year. A chill in Canberra The Australian government, however, is presenting a calm front. It's only natural for a new administration to reassess the decisions of its predecessor, officials say, noting that the new UK Labor government had a review of Aukus last year too."I'm very confident this is going to happen," Defence Minister Richard Marles said of the pact, in an interview with the Australian Broadcasting Corporation (ABC).But there's little doubt the review would be causing some early jolts of panic in Canberra."I think angst has been inseparable from Aukus since its beginning… The review itself is not alarming. It's just everything else," Euan Graham, from the Australian Strategic Policy Institute, tells the BBC. There is growing concern across Australia that America cannot be relied upon."[President Donald Trump's] behaviour, over these first months of this term, I don't think should fill any observer with confidence about America's commitment to its allies," Mr Roggeveen says."Trump has said, for instance, that Ukraine is mainly Europe's problem because they are separated by a big, beautiful ocean. Well of course, there's a big, beautiful ocean separating America from Asia too."Washington's decision to slap large tariffs on Australian goods earlier this year did not inspire confidence either, with Prime Minister Anthony Albanese saying it was clearly "not the act of a friend".Albanese has stayed quiet on the Aukus review so far, likely holding his breath for a face-to-face meeting with Trump on the sidelines of the G7 summit in Canada next week. This is a chat he's still desperately trying to get the US president to agree several former prime ministers have rushed to give their two Morrison, the conservative leader who negotiated the Aukus pact in 2021, said the review should not be "over-interpreted" and scoffed at the suggestion another country could meet Australia's security needs. "The notion… is honestly delusional," he told ABC radio. Malcolm Turnbull, who was behind the French submarine contract that Morrison dramatically tore up in favour of Aukus, said Australia needs to "wake up", realise it's a "bad deal" which the US could renege on at any point, and make other plans before it is too Paul Keating, a famously sharp-tongued advocate for closer ties with China, said this "might very well be the moment Washington saves Australia from itself"."Aukus will be shown for what it always has been: a deal hurriedly scribbled on the back of an envelope by Scott Morrison, along with the vacuous British blowhard Boris Johnson and the confused President Joe Biden."The whiff of US indecision over Aukus feeds into long-term criticism in some quarters that Australia is becoming too reliant on the for Australia's own inquiry, the Greens, the country's third-largest political party, said: "We need an independent defence and foreign policy, that does not require us to bend our will and shovel wealth to an increasingly erratic and reckless Trump USA." What could happen next? There's every chance the US turns around in a few weeks and recommits to the the end of the day, Australia is buying up to five nuclear-powered submarines at a huge expense, helping keep Americans employed. And the US has plenty of time - just under a decade - to sort out their supply issues and provide them."[The US] also benefit from the wider aspects of Aukus - all three parties get to lift their boat jointly by having a more interoperable defence technology and ecosystem," Mr Graham so, the anxiety the review has injected into the relationship is going to be hard to erase completely – and has only inflamed disagreements over Aukus in there's also a possibility Trump does want to rewrite the deal."I can easily see a future in which we don't get the Virginia class boats," Mr Roggeveen says, referring to the interim would potentially leave Australia with its increasingly outdated fleet for another two decades, vulnerable while the new models are being designed and happens in the event the US does leave the Aukus alliance completely?At this juncture, few are sounding that alarm. The broad view is that, for the US, countering China and keeping the Pacific in their sphere of influence is still crucial. Mr Roggeveen, though, says that when it comes to potential conflict in the Pacific, the US hasn't been putting their money where its mouth is for years."China's been engaged in the biggest build-up of military power of any country since the end of the Cold War and the United States' position in Asia basically hasn't changed," he the US leaves, Aukus could very well become an awkward Auk – but could the UK realistically offer enough for Australia to sustain the agreement?And if the whole thing falls apart and Australia is left without submarines, who else could it turn to?France feels like an unlikely saviour, given the previous row there, but Australia does have options, Mr Roggeveen says: "This wouldn't be the end of the world for Australian defence."Australia is "geographically blessed", he says, and with "a reasonable defence budget and a good strategy" could sufficiently deter China, even without submarines."There's this phrase you hear occasionally, that the danger is on our doorstep. Well, it's a big doorstep if that is true… Beijing is closer to Berlin than it is to Sydney.""There is this mental block in Australia and also this emotional block - a fear of abandonment, this idea that we can't defend ourselves alone. But we absolutely can if we have to."
Reuters
5 hours ago
- Reuters
Fed to release 2025 bank stress test results on June 27
WASHINGTON, June 13 (Reuters) - The Federal Reserve announced on Friday that it would publish the 2025 results of its annual big bank stress tests on June 27. The U.S. central bank conducts the test each year, in which it examines how large banks would perform against a hypothetical economic downturn and market strains.
The Independent
5 hours ago
- The Independent
Boeing 787 Dreamliner: a passenger and airline favourite, with some nightmares along the way
The Boeing 787 Dreamliner was the first truly 21st-century big jet. More than 1,000 are in service, and many passengers rate it more highly than other aircraft. The carbon-fibre twin-engined 787 was designed partly as a replacement for Boeing's veteran 767 – but also to introduce passenger-friendly benefits such as larger windows and higher cabin pressure. The Dreamliner was also accountant friendly, burning about one-fifth less fuel than the 767, and allowed airlines' network planners to dream of ultra-long routes. The daily Qantas nonstop between London Heathrow and Perth in Western Australia, covering over 9,000 miles, is a doddle for a suitably configured 787. Boeing's bet was that an efficient aircraft with plenty of range would enable plenty of previously unserved city pairs to be flown profitably. The wager at arch-rival Airbus was different: think big. Going one step beyond the 747 Jumbo jet by extending the double deck for the length of the aircraft. The European engineers came up with world's largest people-mover: the Airbus A380 'SuperJumbo'. Both the 787 and A380 endured long and troubled gestations, but the Airbus plane was first in service – beating the 787 by a couple of years. To the chagrin of the Toulouse-based planemaker, few airlines were impressed. It was a 20th-century concept, with four thirsty engines to nourish and maintain. Only Emirates has ordered the Airbus A380 at scale, to feed its mega-hub in Dubai. In contrast the 787 has been a plane for all seasons. Europe's biggest holiday company, Tui, has 13 of the jets. They can shuttle hundreds of holidaymakers efficiently between the UK and the Mediterranean in summer, then in winter show off their long legs to the Caribbean and South East Asia. Premier league airlines configure the Dreamliner for comfort: British Airways has a total of 42 in service and on order, while Virgin Atlantic has 17 – with names like Dream Girl and Dream Jeannie. But the choice of engines that both the UK carriers chose have proved something of a nightmare. The Rolls-Royce Trent 1000 engine, 'optimised specifically to power the Boeing 787 Dreamliner family' has been unkindly described by aircraft engineers as having 'chocolate fan blades'. A shortage of serviceable aircraft caused both BA and Virgin to cancel routes to Kuala Lumpur and Accra respectively. Yet at least the 787 is now flying at scale. For three months in 2013, the young plane was grounded worldwide because of fears of conflagration involving the lithium batteries that were installed: a newly arrived Ethiopian Airlines Dreamliner from Addis Ababa burst into flames at Heathrow. No one was hurt, but the plane was banned from flying until Boeing came up with a fix. More recently, safety shortcomings at the US manufacturer have come under the spotlight. And the first fatal crash of the 787 on Thursday 12 June, killing hundreds in Ahmedabad, will sharply increase the focus on the plane's airworthiness. Investigators sifting through the wreckage of the Air India jet will pore over the components that are still intact after the impact and subsequent fire to see if some kind of systems failure had contributed to the disaster. Were a previously unidentified design flaw to be identified, resulting in another worldwide grounding order, global aviation would be traumatised: already the number of active long-haul aircraft are struggling to meet demand, and removing more than 1,000 wide-bodied planes would wreck millions of travel plans. Meanwhile, the Boeing 787 Dreamliner is approaching middle age on the aircraft spectrum – and the younger Airbus A350 has stolen its most-preferred title. Between London and Doha, Qatar Airways consigns its first-edition 787s to the Gatwick budget route, rather that the pricier premium Heathrow link. These tired-looking high-density aircraft are also deployed on low-revenue routes such as Doha-Kathmandu. My experience from Gatwick via the Gulf hub to the Nepali capital on back-to-back 787s last October was uncomfortable and joyless. Yet Gulf rival Emirates will soon welcome dozens of Dreamliners into its fleet for the first time. British travellers are likely to be flying on the 787 for a couple of decades yet. But after the tragedy in Ahmedabad, passengers' appreciation of the Dreamliner may diminish.
