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The Royal Bank of Australia yesterday announced that interest rates will remain at 1.5 per cent, where it has sat ever since August 2016.
RBA governor Philip Lowe said the low interest rate would continue to support the economy: “Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual,”
“Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
Mr Lowe said while international economic growth slowed in the latter half of 2018 and the start of 2019, the outlook remained “reasonable”.
Domestically, he focused on rising employment rates, with unemployment at $% and ax expected further decrease to 4.75% in the next couple of years.
“The stronger labour market has led to some pick-up in wages growth, which is a welcome development,” he said.
“The improvement in the labour market should see some further lift in wages growth over time, although this is still expected to be a gradual process.”
Mr Lowe said inflation rates remained low and stable, and the Melbourne and Sydney housing markets remained soft.
However, the speech Mr Lowe gave to the National Press Club in early February hinted at a future change in the interest rate: “If Australians are finding jobs and their wages are rising more quickly, it is reasonable to expect that inflation will rise and that it will be appropriate to lift the cash rate at some point,”
“On the other hand, given the uncertainties, it is possible that the economy is softer than we expect, and that income and consumption growth disappoint.
“In the event of a sustained increase in the unemployment rate and a lack of further progress towards the inflation objective, lower interest rates might be appropriate at some point.”
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By Wendy Chamberlain
Copyright 2019 | All Rights Reserved
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With a passion for all things real estate spanning over 20 years, Wendy loves that her role as a Buyers Agent and Sellers Advocate gives her buying and selling clients an experienced voice they can trust when it comes to negotiating to buy or sell something as important as their home or investment. Wendy considers it a privilege to be asked to help others realise such an important goal as home ownership and to be trusted with that honour. Get in touch today via www.wendychamberlain.com.au for a no obligation chat about how Wendy can work with you and help you save time and money to secure your new home sooner.