RBA leaves rates on hold

Interest rates are staying on hold for another month, after the Reserve Bank of Australia decided in its first meeting of the year to sit on the sidelines and wait for previous cuts to spur on economic growth.

The cash rate, already at a record low of 2.5 per cent, has not been changed by the central bank since August last year.

The move was widely expected by economists, who said the unexpected rise in consumer prices in the last quarter of 2013, coupled with strong growth in the housing market, meant it would be unlikely that the RBA would ease monetary policy again today.

The central bank's meeting came after a raft of data released on Monday pointed to the mixed outlook facing the Australian economy.

Sydney and Melbourne remained among the key drivers of house prices, with prices across the eight capital cities rising 1.2 per cent in January, after the 9.8 per cent jump last year.

Building approvals retreated slightly in December, but remained above 16,000, a level it has maintained for four months and which is the strongest growth since the measure started two decades ago.

At the same time, ANZ's job advertisements survey for January reflected the softness in the labour market, with ads continuing to fall, although at a slower pace.

Australian manufacturers continued to struggle. The latest round of PMI data from the Australian Industry Group found that conditions in the sector remained soft. Meanwhile, inflation eased in January after a spike in December, according to a TD Securities-Melbourne Institute gauge.

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