Financial services prices fall

Sydney, 23 July, 2009: Yesterday’s release of the Consumer Price Index (CPI) by the Australian Bureau of Statistics (ABS) showed a large fall in the price of financial services, in particular, for deposit and loan facilities.

Over the year ending 30 June 2009, the price of financial services has fallen by almost 10% (9.6%), and for deposit and loan facilities, prices have fallen by a very significant 18%.
 
David Bell, Chief Executive of the Australian Bankers’ Association (ABA) said:  “The large price fall for deposit and loan facilities includes the effect of reductions in Reserve Bank interest rates over the last year and clearly demonstrates the benefits of bank pass-through of interest rate reductions to consumers, as well as strong competition for deposits which have kept the cost of deposits at a higher level.”
 
The ABA also notes that the contribution of financial services to overall consumer prices have fallen to the lowest level since this data were collected by ABS and are now at 7.2%.