News

Rates on hold again as the main east coast property markets cool off

07 June 2018

The Reserve Bank has extended its record run by leaving official interest rates unchanged for the 20thmonth running.

The RBA has been under less pressure to lift rates in recent times as the property markets of Melbourne and Sydney cool off.

In its statement this week the RBA said their continued low cash rate was helping the economy which was still experiencing underemployment, sluggish growth and slow wage growth.

“The low level of interest rates is continuing to support the Australian economy,” their statement said.

“Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.”

“Taking account of the available information, the RBA Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”

Channel Nine finance editor Ross Greenwood said the decision to keep rates old hold again would reduce pressure on households.

“The Reserve Bank here is coming out with reasons as to why it has kept the rates on hold,” he said.

“It says the low level of interest rates supports the Australian economy.”

“They expect the Australian economy this year to pick up above three per cent, which is good economic growth,” he told Nine News.

“They say household consumption with low wages growth is a real source of uncertainty right now.”

And as for the future, Mr Greenwood said to expect rates to stay at 1.5 per cent for some time yet.

“They expect inflation to remain low for some time and even employment growth has slowed.”

“The Reserve Bank, if it starts to move interest rates up, will put enormous pressure on households – it is probably something that no one wants.”

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