It is galling that politicians and some in the business sector try to paint an official interest rate cut as good news when it is simply a signal that tougher times are ahead.

Increasing unemployment rates are the first thing that people will begin to notice.

Up to record levels again, the number of people seeking employment is climbing and with that, the impact to the taxpayer of rising welfare costs.

The "official" number aside, the amount of under-employment in our country is a hidden but is just as troubling with many people looking for more work but unable to find it.

As far as kicking along the housing market goes, lower interest rates can actually have a detrimental effect on this sector.

First home buyers can become the collateral damage in a housing boom as investors and baby boomers make the most of the cheaper rates to snap up housing opportunities, artificially driving up the price of property.

For those already established in the market low interest rates can be great news but for those trying to get in they can be bad.

And then there are the self-funded retirees and those living on fixed incomes.

Lower interest rates for home loans inevitably mean banks are reducing deposit rates and this has a severe impact on those who have saved and invested in bank deposits.

These are often people who have done the right thing and set aside money for their retirement, but are now finding the returns on those savings sliding.

The Reserve Bank knows the Australian economy is in a fragile state that's why it has reduced interest rates and why there's every chance there will be another cut in the next couple of months.

Yes, the cut provides some relief for those families paying off their homes, but as the price of goods and services continues to escalate, a great deal of those savings have already been spent, leaving little to boost the ailing economy.

Paul McLoughlin, editor