Interest rate shock: RBA keep rates on hold

The Reserve Bank of Australia has made a shock decision to leave interest rates unchanged in July, despite wide predictions they would deliver back-to-back cuts.

The RBA held the official cash rate unchanged at 3.85%, citing uncertainty in the global economy and “slightly stronger than expected” inflation.

The RBA has left the cash rate unchanged in July. Picture: NewsWire / Nikki Short

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In a statement following the decision, the board said it could “wait for a little more information” to confirm that inflation remains on track, and said it was well placed to “respond decisively to international developments if they were to have material implications for activity and inflation in Australia”.

Annual trimmed mean inflation – the central bank’s preferred measure to consider – rose 2.4% in the May, down from 2.8% in April.  

More to come.