Reserve Bank tipped to hold interest rate but economists split on when cuts will start

Reserve Bank governor Michele Bullock will speak to the media an hour after the board’s interest rate decision is released.Reserve Bank governor Michele Bullock will speak to the media an hour after the board’s interest rate decision is released.The Reserve Bank is widely tipped to leave its key interest rate on hold at this week’s board meeting, but economists are split on how soon borrowers can expect rate relief.

That tolerance was aimed in part to “preserve as much as possible of the gains that have been made in reducing unemployment and underemployment in recent years”, he said. The corollary, though, was that Australia’s interest rates would also likely ease slower than elsewhere. “So far the evidence indicates that the balance of risks for the RBA should be shifting to consumer spending surprising further to the downside rather than inflation proving more persistent,” he said. “Indeed the news on the inflation front is encouraging”, with the six-month annualised pace of price increases on track to be 3.2% for the current quarter – or just outside the target band.

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