The light at the end of the economic tunnel could be drawing nearer. 

Inflation has dipped to a 3-year low, with the Consumer Price Index rising only 0.4% in the June quarter. 

Banks are taking this as a positive sign, with ANZ and Westpac both cutting mortgage rates within the last week. 

Former Finance Minister Steven Joyce told Mike Hosking that a rate cut could be expected soon. 

He said that the Reserve Bank will be wary of going too soon and unleashing animal spirits in the housing market, but there doesn’t seem to be much in the way of that at the moment.  

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