Why millions of Aussies are set to suffer even with rates on hold in June as Reserve Bank hints at more pain
Reserve Bank left cash rate on hold at 12-year high of 4.35 per cent READ MORE: Why ANZ is forecasting a delay in interest rate cuts
Australian home borrowers are set to face more pain even though the Reserve Bank has left interest rates on hold for the fifth straight meeting - with a new inflation warning.
The RBA has declined to follow the European Central Bank's lead in this month cutting interest rates, simply because Australian inflation is still too high.
The cash was left on hold at a 12-year high of 4.35 per cent on Tuesday after a monthly measure of inflation showed Australia's consumer price index in April climbing to 3.6 per cent, up from 3.5 per cent.
![Australian home borrowers are set to face more pain even though the Reserve Bank has left interest rates on hold for the fifth straight meeting (pictured is a Melbourne auction)](https://i.dailymail.co.uk/1s/2024/06/18/04/86247807-13540861-image-a-13_1718680759394.jpg)
Australian home borrowers are set to face more pain even though the Reserve Bank has left interest rates on hold for the fifth straight meeting (pictured is a Melbourne auction)
The CPI is still well above the RBA's 2 to 3 per cent, with the ANZ Bank last week forecasting the first rate cut would be delayed to February 2025, out from November.
The Reserve Bank on Tuesday warned Australian inflation is still too high - unlike the European Union where prices rose by just 2.6 per cent in the year to April.
'The pace of decline has slowed in the most recent data, with inflation still some way above the mid-point of the 2–3 per cent target range,' it said.
A fall in unemployment in May to 4 per cent, down from 4.1 per cent in April, is also worrying the RBA.
'Conditions in the labour market eased further over the past month but remain tighter than is consistent with sustained full employment and inflation at target,' it said.
This means Australia's four million home borrowers will most likely have to wait for relief from the most aggressive pace of monetary policy tightening since the late 1980s.
![The RBA has declined to follow the European Central Bank's lead in this month cutting interest rates, simply because Australian inflation is still too high (pictured is Reserve Bank Governor Michele Bullock)](https://i.dailymail.co.uk/1s/2024/06/18/04/86247791-13540861-image-a-14_1718680778287.jpg)
The RBA has declined to follow the European Central Bank's lead in this month cutting interest rates, simply because Australian inflation is still too high (pictured is Reserve Bank Governor Michele Bullock)