At its meeting today, the Board decided to leave the cash rate unchanged at 3.60\u00a0per\u00a0cent.<\/p>\n
While inflation has fallen substantially since its peak in 2022, it has picked up more
\n\t\t\t\t\t\t\t\trecently. The Board\u0092s judgement is that some of the recent increase in underlying
\n\t\t\t\t\t\t\t\tinflation
\n\t\t\t\t\t\t\t\twas due to temporary factors and there is uncertainty about how much signal to take from
\n\t\t\t\t\t\t\t\tthe
\n\t\t\t\t\t\t\t\tmonthly CPI data given it is a new data series. Nevertheless, the data do suggest some
\n\t\t\t\t\t\t\t\tsigns
\n\t\t\t\t\t\t\t\tof a more broadly based pick-up in inflation, part of which may be persistent and will
\n\t\t\t\t\t\t\t\tbear
\n\t\t\t\t\t\t\t\tclose monitoring.<\/p>\n
Economic activity continues to recover. Growth in private demand has strengthened, driven
\n\t\t\t\t\t\t\t\tby
\n\t\t\t\t\t\t\t\tboth consumption and investment. Activity and prices in the housing market are also
\n\t\t\t\t\t\t\t\tcontinuing to pick up. Financial conditions have eased since the beginning of the year,
\n\t\t\t\t\t\t\t\tcredit is readily available to both households and businesses and the effects of earlier
\n\t\t\t\t\t\t\t\tinterest rate reductions are yet to flow through fully to demand, prices and wages. On
\n\t\t\t\t\t\t\t\tthe
\n\t\t\t\t\t\t\t\tother hand, money market interest rates and government bond yields have risen more
\n\t\t\t\t\t\t\t\trecently.<\/p>\n
Various indicators suggest that labour market conditions remain a little tight. The
\n\t\t\t\t\t\t\t\tunemployment rate has risen gradually over the past year and employment growth has
\n\t\t\t\t\t\t\t\tslowed.
\n\t\t\t\t\t\t\t\tHowever, measures of labour underutilisation remain at low rates, surveyed measures of
\n\t\t\t\t\t\t\t\tcapacity utilisation are above their long-run average and business surveys and liaison
\n\t\t\t\t\t\t\t\tcontinue to suggest that a significant share of firms are experiencing difficulty
\n\t\t\t\t\t\t\t\tsourcing
\n\t\t\t\t\t\t\t\tlabour. Wages growth, as measured by the Wage Price Index, has eased from its peak but
\n\t\t\t\t\t\t\t\tbroader measures of wages continue to show strong growth and growth in unit labour costs
\n\t\t\t\t\t\t\t\tremains high.<\/p>\n
There are uncertainties about the outlook for domestic economic activity and inflation
\n\t\t\t\t\t\t\t\tand
\n\t\t\t\t\t\t\t\tthe extent to which monetary policy remains restrictive. On the domestic side, the
\n\t\t\t\t\t\t\t\tpick-up
\n\t\t\t\t\t\t\t\tin momentum has been stronger than anticipated, particularly in the private sector. If
\n\t\t\t\t\t\t\t\tthis
\n\t\t\t\t\t\t\t\tcontinues, it is likely to add to capacity pressures. Uncertainty in the global economy
\n\t\t\t\t\t\t\t\tremains significant but so far there has been minimal impact on overall growth and trade
\n\t\t\t\t\t\t\t\tin
\n\t\t\t\t\t\t\t\tAustralia\u0092s major trading partners.<\/p>\n
\t\t\t\t\t\t\tDecision<\/p>\n
The recent data suggest the risks to inflation have tilted to the upside, but it will
\n\t\t\t\t\t\t\t\ttake a
\n\t\t\t\t\t\t\t\tlittle longer to assess the persistence of inflationary pressures. Private demand is
\n\t\t\t\t\t\t\t\trecovering. Labour market conditions still appear a little tight but further modest
\n\t\t\t\t\t\t\t\teasing
\n\t\t\t\t\t\t\t\tis expected. The Board therefore judged that it was appropriate to remain cautious,
\n\t\t\t\t\t\t\t\tupdating
\n\t\t\t\t\t\t\t\tits view of the outlook as the data evolve.<\/p>\n
The Board will be attentive to the data and the evolving assessment of the outlook and
\n\t\t\t\t\t\t\t\trisks
\n\t\t\t\t\t\t\t\tto guide its decisions. In doing so, it will pay close attention to developments in the
\n\t\t\t\t\t\t\t\tglobal economy and financial markets, trends in domestic demand, and the outlook for
\n\t\t\t\t\t\t\t\tinflation and the labour market. The Board is focused on its mandate to deliver price
\n\t\t\t\t\t\t\t\tstability and full employment and will do what it considers necessary to achieve that
\n\t\t\t\t\t\t\t\toutcome.<\/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. While inflation has…\n","protected":false},"author":2,"featured_media":174787,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,246,111,139,69,244,245],"class_list":{"0":"post-174786","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz","13":"tag-personal-finance","14":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/174786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=174786"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/174786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/174787"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=174786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=174786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=174786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}