Senior Economist Matt Grudnoff said while the cut in the official cash rate from 3.85% to 3.60% will provide long-overdue relief for mortgage holders, it should have happened five weeks ago.

“Borrowers should have been celebrating back-to-back cuts today,” he said.

Mr Grudnoff says the drawn-out period of high interest rates achieved its goal months ago – and is now doing more harm than good.

“Interest rates are still restrictive. They’re still weighing the economy down and causing unnecessary pain for borrowers,” he said.

“Headline inflation is at 2.1%. The underlying rate, which moves more slowly than the headline rate, has fallen every quarter for the last year. Unemployment is up and economic growth has almost completely stalled.

“How far do rates need to fall before they are no longer weighing the economy down? That figure is generally considered to be around 3%. So, we still need another two or three 0.25% cuts on top of today’s cut, before rates aren’t dragging the economy down.”