The trickle-down effect, which economists insist will benefit the poor, can be seen in other parts of the global economy. One is the secular trend to lower interest rates, the latest example of which is Brazil which yesterday cut its key Selic interest rate to a new record low at 5 per cent. Behind these moves is the trend to lower wholesale and retail price rises. Today Swiss EU harmonised October CPI dropped by 0.2 per cent (against an expected 0.1 per cent monthly rise), meaning that over the past year prices actually fell by 0.3 per cent, the biggest drop in three years. In Australia, the RBA’s commodity index fell by 4.2 per cent in the year to October, the biggest drop since December 2017’s 6.2 per cent decline.
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