RBA leaves rates on hold; signals inflation still 'too high' and further hikes possible — as it happened
The move was widely expected by economists and followed recent data suggesting inflation was cooling.
The Reserve Bank of Australia (RBA) maintained interest rates at 4.35% during its latest meeting, signaling that inflation remains a significant concern and that further rate hikes could be on the table. This decision was expected and came amid ongoing stress experienced by Australians due to the cost-of-living crisis. David Koch, Compare the Market’s economic director, stated that the decision to keep rates on hold is the right one, considering the widespread financial strain.
Inflation continues to rise faster than the RBA's desired rate, but it is driven by factors beyond the control of households, such as declining property prices. KPMG Australia chief economist Brendan Rynne suggested that falling property prices may help reduce inflation by making people feel less wealthy, leading to decreased consumption.
Treasurer Jim Chalmers acknowledged that while the interest rate hold is positive news, more work remains to be done, particularly in addressing the high inflation and persistent household pressures. The RBA also highlighted other financial conditions, noting that consumer spending growth is gradually slowing, while business debt and investment remain strong.
The housing market has shifted, with falling prices and reduced new housing loans in some capital cities. The RBA expects inflation to remain above 2.5% - the midpoint of its 2-3% target range - until mid-2027. The central bank remains vigilant about the potential impact of global uncertainties, such as the Middle East conflict, on inflation and economic activity.
Despite uncertainties, the RBA remains committed to bringing inflation back to target through further rate increases if needed.
Written by urgent.news from SBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
