In the latest indicators of a faltering economy, figures released yesterday confirmed a further drop in job vacancies and a nationwide fall in house prices.

The Reserve Bank board will meet in Sydney today, and discussions are expected to focus on the timing of a cut in official interest rates.

The meeting will be asked to consider whether there are clear signs that the economy and inflation pressures are easing or whether it should wait for more confirmation before beginning to cut rates.

The bank will announce its decision at 2.30pm.

RBA staff believe that although inflation remains high, the worst of the prices pressure has passed and the inflation rate should fall back to within the bank's 2-3pc comfort zone by 2010.

They also believe there is no need to wait until that happens before cutting rates.

A report sent to board members on Friday said that since the last time they met, there had been confirmation that retail sales had plunged, that credit growth had fallen to a six-year low and that business and consumer confidence were approaching recession levels.

Yesterday, the Bureau of Statistics released figures confirming that prices of established houses fell across much of the nation in the June quarter.

In Melbourne, the index of established house prices fell by 0.3pc — its first quarterly fall since March 2005.

The index of established house prices is regarded as more reliable than those prepared by real estate agents as it compares "like with like" — similar-size houses in a similar mix of suburbs.

ANZ economist Alex Joiner was not surprised at the deterioration, saying the housing market had been pummelled by "a perfect storm of higher mortgage rates, poor affordability, high petrol prices, increases in the costs of living and the beginnings of a broad-based economic slowdown".

However, he expected that underlying demand and supply conditions would shield the market from further sustained falls.

Also indicating a slowing economy was the ANZ's measure of job advertisements, which slid a further 0.3pc in July after falling 3pc in June.