RBA keeps rates unchanged at 4.35%
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The news: The Reserve Bank has kept rates on hold at 4.35% at its August meeting.
The numbers: The RBA also published its updated quarterly forecasts alongside the rates decision. It now expects inflation to remain a bit higher for longer, ending 2024 with its preferred trimmed mean measure at 3.5% rather than the 3.4% tipped in May and returning to the target by the end of 2025.
The unemployment rate is also forecast to be 0.1 percentage points higher than previously anticipated, peaking at 4.4% in June 2025 and remaining at this level until at least December 2026.
But the economy will be stronger in the years ahead on these predictions with lacklustre GDP growth of 0.9% in June 2024 — below the 1.2% expected in May.
The context: There has been increased focus on the RBA for this rates decision due to a better-than-expected inflation result in the June quarter. But the Reserve Bank has retained relatively similar wording to previous statements and its new forecasts see inflation taking longer to come back to the target than expected in May.
What they said: “Data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out. Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range,” the Reserve Bank board said in a statement.
The source: RBA board statement
