Reserve Bank holds interest rates as it waits for inflation to ease

The Reserve Bank has held official interest rates steady but left open the door to an increase later in the year if inflation fails to come to heel.

Since the bank’s last board meeting, the unemployment rate has edged down to 4 per cent but the number of ads for new jobs has continued to fall. The Fair Work Commission announced a 3.75 per cent increase in the minimum wage to start from July 1. “And unlike those in the Coalition who are talking about the need for austerity budgets like we saw in 2014, that really hurt people, what we’ve done is create 880,000 jobs, and we are providing increases in real wages as well as tax cuts.“We want to make sure that we put inflation down without punishing people. And if we can come through what’s been a difficult global period with living standards rising, then that will be a very positive outcome.

The board noted there remained a lot of uncertainty over the economic outlook since its most recent forecasts were released early last month.

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