After the latest inflation figures released on Wednesday showed that the Australian economy is slowing, economists are now tipping an interest rate cut.

Among them, financial market strategist Stephen Koukoulas said an interest rate cut next Tuesday from the RBA is close to certain.

“The low inflation result for the September quarter should give the RBA plenty of confidence that its restrictive policy stance of the last year, in combination with the most dramatic fiscal tightening Australia has ever seen, will see inflation stay at or even fall below the middle of its 2 to 3 per cent target range,” he said.

Aussie Home Loans, one of Australia’s leading mortgage brokers and non-bank lenders, has called for the Reserve Bank to drop official interest rates by at least 0.25 per cent.

Aussie Executive Chairman John Symond said on Thursday it is time for the Reserve Bank to inject some much needed confidence back into consumers.

“We are heading into the crucial Christmas retail season and a rate drop will boost sales and the rest of the economy. Australia is slowly recovering from the Global Financial Crisis but is susceptible to any economic shocks, which continue to be felt overseas”, he explained.

Mr Symond said the non-mining economy had been slowing for many months and the continuing lack of consumer confidence was hurting businesses.

“Many Australians are worried about their job security and are not spending money, while the spectre of new taxes is also hanging over them. The Reserve Bank has been consistently talking up interest rates over the last year and this has contributed to consumers’ reluctance to spend.”