Cash Rate On Hold The Reserve Bank of Australia has left the cash rate on hold for the seventh consecutive month.
The rate remains at 4.35%. The RBA says inflation has fallen substantially since its peak in 2022, as a result of interest rate rises.
“But the pace of decline has slowed in the most recent data, with inflation still some way above the midpoint of the 2% to 3% target range,” it says.
Westpac senior economist Matthew Hassan says it appears the RBA is more confident of achieving a sustained return to sub-3% inflation.
PropTrack director of economic research, Cameron Kusher, says there have been weak retail sales, slowed economic growth and low consumer sentiment.
“Building activity is at decade-low levels, exacerbated by a lack of new construction, which is creating a chronic shortage of housing. The imbalance between housing supply and demand has offset the higher interest rate environment and deterioration in affordability, fuelling home prices and rents,” he says.
Economists who had earlier in 2024 been bullish at a rate drop by November this year are now beginning to change their forecasts to a rate drop in January 2025.
