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Minutes from the RBA’s June board meeting, released yesterday, have revealed an economy unlikely to result in immediate rises to official interest rates.
Board members noted that flat retail sales, a decline in household and commercial loan approvals, lower growth in housing and business credit as well as subdued business and consumer confidence, all helped to moderate inflationary pressures over the last month.
These factors were behind the board’s decision to leave rates unchanged at 7.25 percent.
Concern however remains over the rise in Australia’s terms of trade, which are expected to add substantially to national incomes and the ability of consumers to spend.
“Should demand not slow as expected or should expectations of high ongoing inflation begin to affect wage and price setting behaviour, the outlook and the stance of policy would need to be reviewed.”
Published: 18-06-08
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