Calls to cut interest rates grow as Australian economy falters

Sydney

PRESSURE is building on Australia's central bank to cut interest rates from their record lows as growth in the resources-driven economy - already faltering on the back of China's slowdown - takes a further hit, analysts say.

The Reserve Bank of Australia (RBA) has repeatedly said it will continue to maintain a "period of stability in interest rates", but softening GDP growth figures last week sparked a flurry of economists forecasting further monetary policy easing. That would take the cash rate below 2.5 per cent, where it has been for 16 months.

"The GDP read . . . is creating a very dark shadow over the state of the Australian economy with income growth now in recession," said IG markets strategist Evan Lucas. "The pres…