The Reserve Bank has decided to leave official interest rates at the record low 1.5 per cent set over August. The bank will await the impact of last month’s cut to assess if further reductions are required.
Despite rates remaining on hold, the latest economic data continues to be underwhelming, and there is a chance of another rate cut later this year.
Unemployment levels are still near three-year lows although much of the recent employment growth has been in part-time jobs.
The trend for home-building approvals for houses and units remains below its previous peaks, and recent activity mainly reflects growth in Sydney apartments and Melbourne houses.
Recent retail sales activity has also remained relatively flat, and the Australian dollar is still higher than desirable although the recent sharemarket rally appears to have consolidated.
Early spring housing markets are continuing to benefit from lower mortgage rates following strengthening auction activity and rising prices over winter in most capitals.
Despite an unchanged rate over September, the likelihood of a rate cut later in the year will be particularly strong if the labour market deteriorates and inflation continues to decline.