The Reserve Bank has left official interest rates on hold for a record 26th month at a record low rate of 1.5%. All 31 economists surveyed by rate comparison website nder.com.au had predicted the RBA’s verdict. Most expect rates to remain unchanged until at least the second half of next year.
“The low level of interest rates is continuing to support the Australian economy,” says RBA governor Philip Lowe. “Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.
“The improvement in the economy should see some further lift in wages growth over time, although this is likely to be a gradual process.”
John Kolenda, managing director of 1300HomeLoan, says the continued uncertainty caused by the financial services royal commission was an influence, stating that the RBA should “help navigate” the economy “through these uncertain times”.
“We have other elements such as the US-China trade war, downward pressure on the property market and the federal election looming,” he says.