Treasurer Wayne Swan is urging banks to pass on interest rate cuts as quickly as possible, as the Reserve Bank board meets this morning.
The market is factoring in a 25 basis point reduction, but it is far from certain the Reserve will cut rates, with economists regarding it as the closest call for some time.
The meeting comes as new job advertisement figures point to unemployment continuing to rise when March's official figures are published on Thursday.
The ANZ job ads survey showed an 8.5per cent fall in March to an average 147,804 a week and the bank's economists are predicting the unemployment rate will jump 0.3percentage points to 5.5per cent with a 33,000 drop in jobs. ''We now expect the unemployment rate to exceed 8per cent next year,'' they said.
They also predicted the economy would contract by about 1per cent in 2009, with at least two and possibly four quarters of negative growth.
For more, pick up a copy of today's Canberra Times
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