The Reserve Bank Board today left the cash rate unchanged at 1.50%. For full details, please refer to the Statement by Philip Low or contact us to discuss your financial planning needs. Key points from the media release include:
- The broad-based pick-up in the global economy is continuing. Labour markets have tightened further in many countries and forecasts for global growth have been revised up since last year.
- Headline inflation rates, having moved higher over the past year, have declined recently in response to lower oil prices. Wage growth remains subdued in most countries, as does core inflation.
- The Australian economy is expected to strengthen gradually, with the transition to lower levels of mining investment following the mining investment boom almost complete.
- Indicators of the labour market remain mixed. Employment growth has been stronger over recent months. The various forward-looking indicators point to continued growth in employment over the period ahead. Wage growth remains low, however, and this is likely to continue for a while yet.
- Conditions in the housing market vary considerably around the country. Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years.
- Rent increases are the slowest for two decades. Growth in housing debt has outpaced the slow growth in household incomes.
- Taking account of the available information, the 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.