THE NEWS WRAP: Big four pass on rate cut

All four major banks have passed on the Reserve Bank’s rate cut, saying they want to support customers in a tough economic period even though their own costs are rising.

Westpac and the Commonwealth Bank have now joined the other two major banks in cutting interest rates on their standard variable home loans.

The banks have been under pressure to pass on the rate cut, which will not come into effect until later this month.

Treasurer Wayne Swan said banks that did not pass on the rate cut “face the very real risk of massive damage to their reputations and to their customer base”.

Final sale for Fletcher Jones

A restructuring of retailer Fletcher Jones, placed into administration on Wednesday, could result in the closure of some or all of its 44 stores ahead of a sale likely to be finalised by January.

The privately-owned company, which has been operating since 1918, would keep trading but must be sold to meet unsecured debts of $8.5 million and $1 million staff liabilities, administrator Bruno Secatore says.

“It can’t trade out of its difficulties. It has to be sold,” Secatore says.

Unemployment rate hits 5.3% 

Australia’s jobs market is weakening as businesses look to cut costs to cope with a worsening global economy.

Data released yesterday by the Australian Bureau of Statistics shows Australia’s unemployment rate rose to 5.3% in November from 5.2% in October.

Total employment fell 6,300 to 11.457 million in the month, while the participation rate dropped 0.1% to 65.5%.

The data was significantly weaker than market forecasts of a rise in employment of 10,000 jobs in the month, indicating the jobs market is softening.

Overnight

The Australian dollar fell sharply as European leaders meet for what has been billed a “make or break” summit to resolve the region’s crippling debt crisis.

The local currency was trading as high as US103.75 cents shortly after midnight, but has since fallen below US102 cents.

At 6.19am, the Australian dollar was trading at US101.81 cents, down from US102.64 cents at 5pm yesterday.