RBA interest rate announcement and commentary - August 2023
The Reserve Bank of Australia (RBA) has decided to leave the cash rate target unchanged at 4.1%
In a statement the The RBA Governor, Phillip Lowe stated that "Inflation in Australia is declining but is still too high at 6%. Goods price inflation has eased, but the prices of many services are rising briskly. Rent inflation is also elevated. The central forecast is for CPI inflation to continue to decline, to be around 3¼% by the end of 2024 and to be back within the 2–3% target range in late 2025."
The economy is experiencing a period of below-trend growth which is expected to continue for some time, conditions in the labour market remain tight and wages growth has increased in response to high inflation and the tight labour market.
Lowe said "The outlook for household consumption is an ongoing source of uncertainty. Many households are experiencing a painful squeeze on their finances, while some are benefiting from rising housing prices, substantial savings buffers and higher interest income. In aggregate, consumption growth has slowed substantially due to the combination of cost-of-living pressures and higher interest rates."
Returning inflation to target is the RBA's priority and they will do what is necessary to achieve it, indicating that further increases to the cash rate may be required.
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General advice warning
The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.