RBA Holds Cash Rate at 4.35% Amid Ongoing Inflation Concerns

The Reserve Bank of Australia (RBA) has decided to hold the cash rate at 4.35 per cent, giving homeowners a reprieve from further mortgage pain.

This decision was widely predicted by financial experts, including those at all four major banks, after last month's inflation figures came in lower than expected.

The consumer price index (CPI) was 3.8 per cent in June, above the RBA's target of between 2 and 3 per cent, but significantly lower than predicted.

RBA governor Michele Bullock reiterated that future hikes would remain on the table as long as inflation remains above target, saying 'We're not ruling that out, but we're saying we want to get a bit more information to confirm whether or not we still seem to be on that path.'

The RBA predicted inflation will remain above target until late 2027, and economic factors such as falling house prices and a softening labour market may indicate the three hikes to the cash rate in the first half of the year had been effective.