CPO - significant fall in prices for deposit

Sydney, 30 October, 2009: The Australian Bankers’ Association (ABA) said over the 12 months to the end of September 2009, the cost of financial services (excluding insurance) fell by a large 10.4% compared with an increase of 1.3% for the Consumer Price Index (CPI).
 
Two expenditure classes make up financial services i.e. deposit and loan facilities and other financial services.
 
Over the 12 months to the end of September 2009, the price of deposit and loan facilities fell by a large 17.0% and other financial services decreased by 0.5%.

From September 2008 to April 2009, the RBA reduced the cash rate by 425 basis points.  Prices of bank products and services fell considerably over that period.  The chart shows a very clear fall in the rate of annual increase in the price of financial services – which is now strongly negative.

For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439
           
ENDS