RBA Holds Cash Rate at 4.35 Percent Amid Lower Inflation Expectations

The Reserve Bank of Australia (RBA) has decided to hold the cash rate at 4.35 percent for another month, giving homeowners a temporary reprieve from further mortgage pain.

This decision was widely predicted by financial experts and major banks, following last month's inflation figures that came in lower than expected.

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

RBA Governor Michele Bullock reiterated that future hikes would remain on the table as long as inflation remains above target, saying 'The board is determined to ensure that expectations of higher inflation do not become embedded in price and wage setting decisions.'

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