Reserve Bank leaves official interest rates on hold again in July

Official interest rates will remain on hold again over July at the record low 1.5 per cent where they have settled since August 2016.

Latest economic data has improved encouraging the Reserve Bank to maintain its recent conservative approach to official rate settings.

Although monthly unemployment measures can be volatile, the ABS reported a sharp decline in the national seasonally adjusted rate over May from 5.7 per cent to 5.5 per cent and the lowest result since February 2013.

With the recent sharp decline in the jobless rate, the Reserve Bank is now more likely to keep rates on hold for the foreseeable future – although the recently underperforming economy is not out of the woods yet.

Housing markets continue to ease with the usual winter slowdown now affecting Sydney and Melbourne with lower auction clearance rates again over June.

Recent changes to stamp duty payable by first home buyers in NSW and Victoria should act to supplement buyer activity.

• Official interest rates remain steady over July
• Latest economic news better
• Steady outlook now for rates
• Winter housing markets continue to weaken but still solid overall

Andrew Wilson is Domain Group Chief Economist
Twitter@DocAndrewWilson
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