Interest rates will remain unchanged after the Reserve Bank of Australia decided to keep the cash rate at 4.35%, a figure that has held steady since November. It comes amidst the ongoing struggle with rising costs of living pressures.

Council of the City of Sydney

Interest rates in Australia remain unchanged as the Reserve Bank of Australia (RBA) decided to keep the cash rate at 4.35%, a figure that has held steady since November. This decision comes amidst the ongoing struggle many Australians face, with rising costs of living impacting their daily lives significantly. Charities like Vinnies are providing essential support for those having to make tough choices, illustrating the broader economic hardships.

The RBA Governor acknowledged the persistent issue of inflation, expressing a shared desire for a quicker resolution to the rising prices that affect everyone. The impact of inflation is felt widely, with many experiencing 'shock' at the rising costs of necessities such as petrol. Despite the pressures, the RBA's stance on interest rates aims to avoid further increases unless deemed absolutely necessary.

The outlook for Australia's economy reflects cautious optimism with expectations of lower growth due to prolonged higher interest rates. However, the RBA's inflation forecasts have been adjusted, now anticipating that the Consumer Price Index (CPI) will exceed previous predictions but eventually realign with the target range of 2-3% by the end of 2025. This situation demands vigilant monitoring of inflationary pressures.

The government is also aware of the financial strains on the population, promising a focus on addressing these pressures in upcoming budgets. While the RBA plans to meet again next month, economists speculate there will be no change in interest rates until at least August, following the next quarterly CPI reading in July. Opinions on the future direction of interest rates vary, with some suggesting a possible cut in November, while others do not discard the chance of an increase. Amidst these uncertainties, the RBA maintains a cautious stance, underscoring the unpredictable nature of the economic landscape.



RBA keeps interest rates on hold

Straining to make ends meet. At this inner-city charity centre, Vinnies is offering help for people facing the choice between feeding themselves or their best friend. Money-wise these days with the economy the way it is, it's very tough. The RBA Governor agrees soaring prices, inflation, remain a problem. I think we would all like it to be coming down more quickly and the reason being because it hurts. I went to fill up my car with petrol the other day and I got an absolute shock. The RBA board today left the cash rate on hold at 4.35% where it's been since November. I hope that we don't have to raise interest rates again. Having said that, if we think we have to, we will. What they're saying is that with higher interest rates for longer, growth might be a little bit lower this year. Its inflation forecast has changed too. Compared to three months ago, it's now predicting CPI will chart higher but still return to the target 2-3% band by the end of 2025. We need to be a little bit vigilant on this. We've made welcome and encouraging and substantial progress in the fight against inflation but it's not mission accomplished because people are still under pressure and that's why the budget will have a big focus on the legitimate pressures that we know people are under. The RBA board meets again next month, but economists say if they didn't move today, they won't in June either. You won't get another read, a quarterly read for the CPI until July. So August is the first possible live meeting. For me, the first one is probably November and then it's probably a cut. Others say a rise is possible too. The RBA sticking to its well-worn line, but the outlook remains uncertain and the board is not ruling anything in or out. Things are pretty bumpy. Daniel Sutton for 10 News First.

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