At its meeting today, the Board decided to leave the cash rate unchanged at 3.60\u00a0per\u00a0cent.<\/p>\n
\t\t\t\t\t\t\tThe decline in underlying inflation has slowed.<\/p>\n
Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to
\n\t\t\t\t\t\t\t\tbring aggregate demand and potential supply closer towards balance. Both headline and trimmed mean
\n\t\t\t\t\t\t\t\tinflation were within the 2\u20133\u00a0per\u00a0cent range in the June quarter. Recent data, while partial
\n\t\t\t\t\t\t\t\tand volatile, suggest that inflation in the September quarter may be higher than expected at the time of
\n\t\t\t\t\t\t\t\tthe August Statement on Monetary Policy.<\/p>\n
\t\t\t\t\t\t\tDomestic economic activity is recovering but the outlook remains uncertain.<\/p>\n
Data for the June quarter show that private demand is recovering a little more rapidly than expected,
\n\t\t\t\t\t\t\t\ttaking over from public demand as the driver of growth. In particular, private consumption is picking up
\n\t\t\t\t\t\t\t\tas real household incomes rise and measures of financial conditions ease. The housing market is
\n\t\t\t\t\t\t\t\tstrengthening, a sign that recent interest rate decreases are having an effect. Credit is readily
\n\t\t\t\t\t\t\t\tavailable to both households and businesses.<\/p>\n
Various indicators suggest that labour market conditions have been broadly steady in recent months and
\n\t\t\t\t\t\t\t\tremain a little tight. Growth in employment has slowed by slightly more than expected, but the
\n\t\t\t\t\t\t\t\tunemployment rate was unchanged at 4.2\u00a0per\u00a0cent in August. Measures of labour underutilisation
\n\t\t\t\t\t\t\t\tremain at low rates and business surveys and liaison suggest that availability of labour has been little
\n\t\t\t\t\t\t\t\tchanged of late. Looking through quarterly volatility, wages growth has eased from its peak, but
\n\t\t\t\t\t\t\t\tproductivity growth has been weak and growth in unit labour costs remains high.<\/p>\n
There are uncertainties about the outlook for domestic economic activity and inflation stemming from both
\n\t\t\t\t\t\t\t\tdomestic and international developments. On the domestic side, stronger-than-expected data on growth and
\n\t\t\t\t\t\t\t\tinflation may indicate that households have become more comfortable consuming as real incomes and wealth
\n\t\t\t\t\t\t\t\trise. If this continues, it may make it easier for businesses to pass on cost increases and lead to more
\n\t\t\t\t\t\t\t\tdemand for labour. Alternatively, the recent growth in consumption might not persist, particularly if
\n\t\t\t\t\t\t\t\thouseholds become more concerned about overseas developments.<\/p>\n
Uncertainty in the global economy remains elevated. There is a little more clarity on the scope and scale
\n\t\t\t\t\t\t\t\tof US tariffs and policy responses in other countries, suggesting that more extreme outcomes are likely
\n\t\t\t\t\t\t\t\tto be avoided. Trade policy developments are nevertheless still expected to have an adverse effect on
\n\t\t\t\t\t\t\t\tglobal economic growth over time. Beyond tariffs, a broader range of geopolitical risks remain a threat
\n\t\t\t\t\t\t\t\tto the global economy. This could all weigh on growth in aggregate demand and lead to weaker labour
\n\t\t\t\t\t\t\t\tmarket conditions in the domestic economy.<\/p>\n
There are also uncertainties regarding the lags in the effect of recent monetary policy easing, the
\n\t\t\t\t\t\t\t\tbalance between aggregate demand and potential supply for goods and services, conditions in the labour
\n\t\t\t\t\t\t\t\tmarket and the outlook for productivity.<\/p>\n
\t\t\t\t\t\t\tMaintaining price stability and full employment is the priority.<\/p>\n
With signs that private demand is recovering, indications that inflation may be persistent in some areas
\n\t\t\t\t\t\t\t\tand labour market conditions overall remaining stable, the Board decided that it was appropriate to
\n\t\t\t\t\t\t\t\tmaintain the cash rate at its current level at this meeting. Financial conditions have eased since the
\n\t\t\t\t\t\t\t\tbeginning of the year and this seems to be having some impact, but it will take some time to see the full
\n\t\t\t\t\t\t\t\teffects of earlier cash rate reductions. The Board judged that it was appropriate to remain cautious,
\n\t\t\t\t\t\t\t\tupdating its view of the outlook as the data evolve. The Board remains alert to the heightened level of
\n\t\t\t\t\t\t\t\tuncertainty about the outlook. It noted that monetary policy is well placed to respond decisively to
\n\t\t\t\t\t\t\t\tinternational developments if they were to have material implications for activity and inflation in
\n\t\t\t\t\t\t\t\tAustralia.<\/p>\n
The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its
\n\t\t\t\t\t\t\t\tdecisions. In doing so, it will pay close attention to developments in the global economy and financial
\n\t\t\t\t\t\t\t\tmarkets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is
\n\t\t\t\t\t\t\t\tfocused on its mandate to deliver price stability and full employment and will do what it considers
\n\t\t\t\t\t\t\t\tnecessary to achieve that outcome.<\/p>\n
\t\t\t\t\t\t\tDecision<\/p>\n
Today\u0092s policy decision was unanimous.<\/p>\n","protected":false},"excerpt":{"rendered":"At its meeting today, the Board decided to leave the cash rate unchanged at 3.60\u00a0per\u00a0cent. The decline in…\n","protected":false},"author":2,"featured_media":46372,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-46371","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/46371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=46371"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/46371\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/46372"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=46371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=46371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=46371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}