RBA Governor Philip Lowe noted the current economic outlook is a “complex picture” with significant uncertainties”. He said in a speech today, “the Board decided that, having already increased rates substantially, it was appropriate to hold interest rates steady this month and re-examine the situation next month.”
Looking ahead, Lowe noted, “It is possible that some further tightening will be required to return inflation to target within a reasonable timeframe,” adding that requirement for further action will largely depend on evolution of the economy and inflation.
He highlighted that the Board will be provided with an updated set of economic forecasts, a revised risk assessment, and fresh data on inflation, the global economy, labour market, and household spending at the next meeting in August to inform its decision-making process.
He pointed to recent forecasts in May which saw inflation returning to top of target band in “mid-2025:. But he acknowledge, Data received since then had suggested that the inflation risks had shifted somewhat to the upside.”
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