Mortgage holders can breathe a sigh of relief after the Reserve Bank halted its unprecedented run of interest rate rises.
The central bank board left the cash rate – which guides interest rates sent by lenders – at 3.6 per cent when it met on Tuesday.
The RBA indicated last month that it would be considering a pause in rate rise in April to allow for additional time to reassess the economic outlook.
Ahead of the meeting, economists at the big four banks were split on whether the RBA would hold or hike rates this month.
Westpac, Commonwealth Bank and the financial markets had tipped a pause while ANZ and NAB had predicted a 25 basis point hike to 3.85 per cent.
Anneke Thompson, chief economist at CreditorWatch, said the economic data released over the last month gave “no clear indication” on where the RBA should go.
“One the one hand, businesses are still reporting very strong conditions and the labour market is still very tight,” she said.
“On the other hand, retail spending has flatlined since September (and must be falling on a per capita basis), and inflation is falling, though still high and well out of the target range.
“It is clear the economy is at an inflection point, the only question now is how hard will it fall.”
Tuesday’s decision, Ms Thompson said, will buy the central bank to assess the incoming data before inflicting further pain on borrowers.
More to come.
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