RBA makes final cash rate call for 2024

The cash rate has now stayed at 4.35 per cent for over one year. Find out here if the Reserve Bank has finally opted to provide relief to millions of home owners ahead of the festive season.

After holding the cash rate in its November meeting, the board of the Reserve Bank of Australia has decided to hold the cash rate at 4.35 per cent ahead of Christmas and New Year’s.

In a statement, the RBA board said: “While underlying inflation is still high, other recent data on economic activity have been mixed, but on balance softer than expected in November.

“Growth in output has been weak. National accounts for the September quarter show that the economy grew by only 0.8 per cent over the past year. Outside of the COVID-19 pandemic, this is the slowest pace of growth since the early 1990s. Past declines in real disposable income and the ongoing effect of restrictive financial conditions continued to weigh on household consumption spending, particularly on discretionary items.

“A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022. That said, employment grew strongly over the three months to October, the participation rate remains close to record highs, vacancies are still relatively high and average hours worked have stabilised. At the same time, some cyclical labour market indicators, including youth unemployment and underemployment rates, have recently declined.

“Wage pressures have eased more than expected in the November SMP. The rate of wages growth as measured by the Wage Price Index was 3.5 per cent over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.

“Taking account of recent data, the board’s assessment is that monetary policy remains restrictive and is working as anticipated. Some of the upside risks to inflation appear to have eased, and while the level of aggregate demand still appears to be above the economy’s supply capacity, that gap continues to close.”