The Reserve Bank has stopped short of announcing an interest rate hike for a second consecutive week, and the Bank of England’s rate is set to rise for the first time in a month.
The RBA is set for a meeting Thursday, when it will discuss the economy and inflation, and a second meeting Monday, when policymakers will discuss whether to raise rates further.
The RBA said it would take into account “the recent volatility in global and regional economic and financial conditions”.
But the RBE said it was “inclined to raise its benchmark rate if economic and inflation conditions warrant”.
While the economy has improved, the RBC said the cost of living remains high and inflation has slowed.
“We have continued to raise our short-term rate for longer-term interest rates, although we have raised the long-term benchmark rate for the third time this year,” the RB said.
The RBC also cut its growth forecast for the year, down from 2.5 per cent in May to 2.2 per cent, and downgraded its growth forecasts for the second quarter to 2 per cent from 3.3 per cent.
It said it expected GDP growth to rebound in the second half of this year.
“Growth in Australia has been robust and rising,” the statement said.
“The outlook for Australia remains positive for the longer-run.”
Inflation remains subdued and the outlook for inflation remains high.
It is also forecasting unemployment to increase to 7.3 million in 2019-20, from 7.2 million in 2018-19.”
Inflation has remained subdued and inflation expectations remain low.”
It is also forecasting unemployment to increase to 7.3 million in 2019-20, from 7.2 million in 2018-19.
The economy contracted in the fourth quarter, and unemployment has increased over the last year.