Navigating Opportunity: Interest Rate Cuts and Business Planning

• Adroit Insurance and Risk
• - March 19, 2025

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The Reserve Bank’s welcome announcement of a 0.25% interest rate cut in February was the first in over four years, reducing the cash rate by 25 basis points to 4.10%.

Impact on Business
The reduction in interest rates will be welcome, assisting businesses in lowering borrowing costs and creating certainty that increasing interest rates were a thing of the past and enabling a review of investments in new plant & equipment.

Implications for Employment and Staffing
Cost of workers remains high and the impact of the Cost of Living Crisis will continue to impact consumer spending in many areas.

Considerations for Business Growth and Planning
While the interest rate cut presents opportunities, businesses should also be mindful of potential challenges. The change in government in the USA and Ukrainian war both are areas for caution.

Tariff wars could disrupt supply chains, energy, costs and weaken the Australian dollar.

The RBA’s decision to lower interest rates introduces a more favourable environment for business, however persistent cost pressures and global economic uncertainties need to be considered.

Talking to your professional financial and insurance advisers can assist in understanding your options and planning.