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Eurozone manufacturing PMIs are well down, hitting a seven-year low in Germany.

Reserve Bank research suggests that the two rate cuts to date will boost growth by 0.25-0.4pp over two years and lift inflation by only 0.1pp over two to three years.

Recent RBA research shows that high mortgage debt is a drag on consumer spending, helping explain the weak growth in consumption since the global financial crisis.

The RBA has cut the cash rate to 1%, arguing that lower rates are an effort to reduce unemployment and not a response to a deteriorating outlook.

Fruit and vegetable prices are the two most volatile components of the CPI and can have a large effect on headline inflation.

Economic growth is slowing as public demand continues to be the main driver of GDP growth.

The federal election and lower expected interest rates have contributed to a rebound in business confidence- but not business conditions.

Governor Lowe has said that reducing unemployment to the bank’s 4.5% estimate of the NAIRU should return inflation to the 2-3% target band.

The RBA is expected to cut the cash rate on Tuesday, with a follow-up cut expected in August.