The Reserve Bank of Australia has cut the nation’s official cash rate by 0.25% to 4.10% – the first interest rate cut since late 2020.

The decision by the independent central bank was widely expected and warmly welcomed by Anthony Albanese’s Federal Labor government, which described it as the “rate relief that Australians need and deserve”.

Australia’s “Big 4” retail banks have pledged to pass on the cut in full to mortgage holders on variable interest rates, offering some relief to stretched homeowners.

However, Reserve Bank Governor Michele Bullock was at pains to warn that further interest rate cuts, pencilled in by financial markets over the next 18 months, are no certainty.

Nevertheless, the decision has the potential to kick-start Australia’s housing market, which has recently seen prices flatline and even fall in some of the major capital city markets.