SYDNEY, (Reuters) – Australia’s central bank is ready to cut interest rates again “if needed” to support employment, wages growth and inflation, having already eased to a record low of 1% earlier this month.

Minutes of the Reserve Bank of Australia’s (RBA) July policy meeting showed its Board decided cutting rates by a quarter point, together with a similar move the previous month, would help speed up the economy.

“Lower interest rates would provide more Australians with jobs and assist with achieving more assured progress toward the inflation target,” the minutes showed.

“The Board would continue to monitor developments in the labor market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time.”

Australia’s A$1.9 trillion economy ($1.3 trillion) is expanding at its weakest pace since the global financial crisis led by a long downturn in the country’s property market and sluggish household consumption.

Financial markets <0#YIB:> have already priced in a real chance of another rate cut to 0.75% by year-end. Economists polled by Reuters prior to the July 2 meeting predicted a third cut in November. [AU/INT]

The RBA Board hoped that “accommodative” monetary policy, strong public demand, a renewed expansion in the resources sector and a surge in exports would revive economic growth over coming years.

Tentative signs of a bottoming in Australia’s housing market were also positive for the beleaguered sector, as well as for household consumption.

The Board noted that public sector investment in welfare schemes and infrastructure had helped boost first-quarter growth, a nudge to the newly re-elected government of Prime Minister Scott Morrison to do more.

RBA Governor Philip Lowe has, in recent public outings, openly called for more fiscal stimulus. So far, Morrison has downplayed the need for such support and stuck to plans for returning the budget to surplus in 2019/20.

Tuesday’s minutes showed the Board had a detailed discussion on retail sector inflation and the impact from increased competition from foreign entrants and online players over the preceding decade or so.

“Members noted that the adjustment in the retail sector had been protracted and had put downward pressure on inflation for some years,” the minutes noted.

“In the more recent period, the effects on prices of greater competition had been difficult to separate from the effects of the prevailing weak demand conditions.”

Retail data suggested discretionary spending had remained soft in the June quarter, the minutes showed.

The Board judged lower rates would support the economy by keeping the value of the Australian dollar lower than it would otherwise be, while also reducing borrowing costs for households and businesses.

Yet, despite two rate cuts since June the Aussie has risen from a 5-1/2 month trough of $0.6829 to current levels around $0.7040.

The gains owe much to intense speculation the U.S. Federal Reserve will start cutting its rates this month, followed by other major central banks.

That suggests the RBA may have to ease yet further to prevent an unwelcome rise in the Aussie dollar.

The RBA also sounded downbeat about global economic conditions, pointing to trade and technology disputes that have hurt manufacturing activity and world exports.

In addition, growth in China, Australia’s No.1 trading partner, has also faltered in recent period.