The Reserve Bank of Australia has left the cash rate unchanged at 3.85 per cent, despite signs inflation is moderating, as it waits for more evidence that price growth will stay on track.<\/p>\n
In a statement following its July meeting, the Monetary Policy Board said inflation had fallen \u201csubstantially\u201d since its 2022 peak, helped by higher interest rates cooling demand. Headline inflation in the March quarter sat at the midpoint of the 2\u20133 per cent target, with the trimmed mean at 2.9 per cent.<\/p>\n
\u201cRecent monthly CPI data suggests June quarter inflation is broadly in line with forecasts, though slightly stronger than expected,\u201d the Board noted.<\/p>\n
With the cash rate 50 basis points lower than five months ago, the Board said it could afford to wait for more data to confirm inflation was heading sustainably to 2.5 per cent.<\/p>\n
The outlook, however, remains clouded by global uncertainty. The RBA flagged risks from unresolved US tariffs and potential knock-on effects on world trade.<\/p>\n
\u201cTrade policy developments are expected to have an adverse effect on global economic activity, and there remains a risk that households and firms delay spending,\u201d the statement said.<\/p>\n
Domestically, private demand has been gradually recovering, real household incomes have picked up and some financial stress indicators have eased. But businesses still report challenges passing on costs due to patchy demand.<\/p>\n
Labour market conditions remain tight, with low underutilisation and firms still struggling to find workers. Yet while wages growth has softened, productivity remains weak, keeping unit labour costs high.<\/p>\n
The Board said it remains focused on its mandate to deliver price stability and full employment. It will continue to closely watch data on global trends, domestic demand, inflation and the jobs market.<\/p>\n
Notably, for the first time, the RBA revealed today\u2019s decision was made by a majority vote, with six members in favour and three against.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Reserve Bank of Australia has left the cash rate unchanged at 3.85 per cent, despite signs inflation is moderating, as it waits for more evidence that price growth will stay on track. In a statement following its July meeting, the Monetary Policy Board said inflation had fallen \u201csubstantially\u201d since its 2022 peak, helped by […]<\/p>\n