Reserve Bank minutes outline reasons for rate hold

RESERVE BANK BOARD MINUTES

* Members agreed that the argument to leave the cash rate unchanged at this meeting was ‚Äúthe stronger one‚ÄĚ.

* They noted recent information on inflation had been encouraging, and the economy was expected to grow only slowly over the period ahead, which would help with the further moderation of inflation.

* Inflation had fallen further and been a little lower than expected in the June quarter, but there had been no material slowing in services price inflation.

* There are some signs that the labour market is at a turning point, including a small rise in the underemployment rate.

* Some further tightening of monetary policy (raising rates) might be required to ensure that inflation returns to target in a reasonable time frame. This will depend on developments in the global economy, trends in household spending, and the outlook for inflation and the labour market.

 

Paul Osborne
(Australian Associated Press)

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