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Whatsapp House price growth is nearing double digits in Sydney, but that's not the case in most of the rest of the country.

It's looking likely the Reserve Bank will cut the official cash rate again on Tuesday, taking it down to just 1.5 per cent. But despite the prospect of ever cheaper credit, a new survey says more households are reporting debt stress. Sheryle Bagwell explains.

ME Bank has released its biannual Household Financial Comfort Report this morning. What has it found?

It's found a twofold increase since December last year of the numbers of households who say they will struggle to meet their minimum debt repayments in the coming year.

Many households are experiencing falling or stalling incomes, and that's now starting to bite.

Some 10 per cent of indebted households are reporting debt stress, which ME Bank says is the highest level since the survey began in 2011.

You would think lower interest rates would be making it easier for households to pay off debt. For some, that remains the case.

But the ME survey finds many households are experiencing falling or stalling incomes, and that's now starting to bite.

We should also remember too that outside of Sydney and Melbourne—where annual house price growth is nearing double digits again—house values aren't rising.

The survey says baby boomers are also reporting lower levels of financial comfort. Because they tend to be savers rather than borrowers, lower interest rates are really bad for their income levels. The proposed changes to super are also spooking that demographic.

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Are economists convinced the RBA will cut rates tomorrow?

The majority believe the bank is more likely than not to cut rates, because of last week's inflation report, which saw consumer price growth come in well below the RBA's target range.

But they also say it's a close call. The risk remains that another rate cut will merely stoke housing prices and household debt.

What might tip the RBA though towards lower rates though is the continuing strength of the Australian dollar.

If they don't cut rates tomorrow, there is a good chance the dollar could spike even higher, maybe towards 80 US cents, particularly with signs the US economy is faltering.

But economists like ME Bank's Jeff Oughton are also questioning whether ever lower interest rates will give the boost to the economy the RBA is seeking.

The reason businesses aren't borrowing isn't that rates are too high; it's because they're uncertain about the outlook for the local and global economy.

Oughton says in these uncertain times the federal government should be using fiscal policy, like spending on infrastructure, to boost business activity.

Lower interest rates for longer though has certainly been a boon for global sharemarkets. How did shares perform in July?

Despite all the risks around—from Brexit, Italian banks, a possible Trump presidency—global shares have rollicked along this past month.

It's all about the search for better returns. With cash deposit rates at record lows, shares and their dividends, along with property, are attractive investments.

But we are at the point where underlying company earnings don't always justify these ever higher share prices, so it could all come to a screaming halt.

That's why professional investors are also still putting money into gold, and low-yielding but safer bonds and cash, as a hedge against a stockmarket crash.

At the same time, investors are trusting central banks will also ride to their rescue in the event of a catastrophe. That's because anytime markets fall, central banks like the US Federal Reserve and the Bank of England signal cheaper credit is on the way.

That's giving investors a degree of comfort right now, but how long that will last is anyone's guess.