Rates hold delivers breathing space for business
1 Aug 2023|
The Reserve Bank’s decision to maintain the cash rate at 4.1 per cent provides valuable breathing space and will be a relief for many businesses.
“The Reserve Bank’s decision to hold the official cash rate will provide a desperately needed reprieve for those businesses that have been struggling with rising input costs and the impact of previous rate increases,” ACCI chief executive officer Andrew McKellar said.
“The impacts of the previous rate increases is clearly starting to come through, with household consumption and dwelling investment weakening. The Reserve Bank is right to wait and see what the full impact of the earlier rate increases will be.
“The Reserve Bank’s decision will help support a more sustainable economic trajectory. It’s a balancing act and today’s decision shows that the Reserve Bank has an awareness of the challenges faced by business. It will not do Australia’s businesses or its people any better by winding the cord of interest rates any tighter.
“While the Reserve Bank noted that further tightening may be necessary in the future, holding the rate steady gives businesses precious time to absorb the impact and adjust their strategies accordingly.
“Inflation is clearly easing, but there is still considerable effort required to return inflation to a figure within the Reserve Bank’s broader target range.
“To keep inflation in check, we urge the federal government to hold its nerve on fiscal policy and to use the opportunity to build a more ambitious agenda for productivity growth.”