The Reserve Bank announced its cash rate decision for the month of December this afternoon, set against a backdrop of a property market that continues to cool despite record low rates.
As widely anticipated, the RBA has left the official cash rate on hold at 1.5 per cent. Australia’s top economists and market commentators were united in predicting another hold, including Leanne Pilkington, managing director at Laing +Simmons, who said increasing it now would have been unwise.
“Subdued housing transaction activity and price declines in some markets make an interest rate increase in the near term an unnecessary risk,” she said. “A strong labour market will be a key factor supporting the economy as we look to the new year.”
Economist Saul Eslake held a similar view, saying that an increase is still some way off. “Some of [the RBA’s] recent commentary appears to indicate slightly greater near-term concerns with regard to the possible consequences of [...]