The cash rate will hold for now, according to recent news from the Reserve Bank of Australia.
Remaining cautious, the RBA announced on 4 November a hold on the cash rate of 3.60 per cent, in a unanimous decision.
Over the year in the September quarter, inflation had lifted quite sharply to 3.2 per cent and was largely expected, after a number of electricity rebates wound down in a number of states.
“Inflation has recently picked up,” the RBA statement reads.
Electricity prices went up quickly and and households have increased their spending more this year as incomes have risen.
Unemployment crept up to 4.5 per cent in September, but the jobs market has been described as ‘healthy’ and expected to remain so.
Falling markedly since a peak in 2022, the statement said higher interest rates have been working to bring the total level of spending in the economy and potential supply closer towards balance.
The Board has said it is focused on delivering low and stable inflation and full employment, but expects a little uptick in the growth in the Australian economy, before it settles again.
Pointing to interest rate cuts earlier in the year, globally, growth is expected to slow, and the effect on Australia is ‘not likely to be large.’
With a question mark over the global economy, so far, there has been little impact on growth and trade, and the RBA said that many forecasters have revised up their near-term expectations for world growth.
“Trade policy developments are still expected to have an adverse effect on world growth over time,” they said.
With a focus on maintaining price stability and full employment, the RBA said that recent data on inflation suggests that some inflationary pressure will be sticking around in the economy.
“With private demand recovering and labour market conditions still appearing a little tight, the Board decided that it was appropriate to maintain the cash rate at its current level at this meeting,” said their media release online.
The RBA has also released its latest official forecast online, and the Board’s final meeting of the year will take place on December 8-9.
