Today the Reserve Bank’s Monetary Policy Board held interest rates steady at 4.35 per cent.
This will come as a relief to Australians with a mortgage.
It’s a welcome decision at a time of heightened uncertainty in the world and persistent pressures at home.
This is the second rates decision since the Budget and on both occasions, we’ve seen rates held steady.
This decision reflects the fact that inflation has been coming in well under the Reserve Bank and Treasury forecasts.
In the RBA’s Statement on Monetary Policy, they have downgraded forecasts for underlying inflation and upgraded growth.
In June, headline inflation fell again and trimmed mean inflation was stable.
Inflation has now moderated three months in a row but it’s still higher than we’d like and people are still under pressure.
Recent inflation data has been a bit better than expected but the war in the Middle East is putting upward pressure on prices and weighing on global and domestic growth.
We already had an inflation challenge in our economy but the conflict is making it harder.
From an economic point of view, we desperately need a proper and enduring end to this war.
Inflation has gone up since March in most major advanced economies but has come down here.
When we came to office, inflation was north of six per cent and rapidly rising, it’s now much lower than that. Underlying inflation was almost five per cent, it’s now also much lower.
The Government’s responsible economic management has meant the budget is much stronger and debt is much lower compared to what we inherited.
Just last week S&P Global endorsed the Government’s responsible economic and fiscal management by re‑affirming Australia’s AAA credit rating.
Australia remains one of only nine countries with a AAA sovereign credit rating from all three major ratings agencies and has lower gross debt than every major advanced economy.
The actions we took in the Budget are helping to take the pressure off inflation at a time of global uncertainty.
We’ve made progress on inflation and in the economy, but there’s more work to do because people are still under pressure.
We’re taking action by addressing inflation, cutting taxes five times in three ways, and helping with the cost of living in an ongoing and responsible way.