Bullock warned that while the monthly data should be “taken with a grain of salt”, it suggested there were a couple of areas, such as in housing construction, where inflation may be a little higher than had been expected.
“So we’re just being a little bit cautious about that,” she said.
“I don’t think … that inflation is running away. But we just need to be a little bit cautious.”
Treasurer Jim Chalmers said the decision was “not the outcome millions of homeowners would have wanted” while focusing on the three rate cuts since February.
“Interest rates have already come down three times in six months this year and that’s a very good thing,” he said.
“We got both headline and underlying inflation at their lowest rates in almost four years and both of them back in the Reserve Bank’s target band.”
But shadow treasurer Ted O’Brien said the government was to blame for the bank’s decision to leave rates on hold.
“This is a direct consequence of the Albanese government’s spending spree,” he told reporters.
“There is a reason why rates have been higher for longer in Australia, and that is this Albanese government ensuring that they keep spending and a big government approach is their mode of operation.”
The bank did note that there were positive signs the private sector – led by consumers – was taking over from the public sector in supporting the economy.
The head of Deloitte Access Economics, Pradeep Philip, said despite it was too early to declare the Reserve Bank had finished cutting rates.
He said while there were some economic “green shoots”, they were unlikely to “flower anytime soon”.
“To be clear, the economy is not overheating as some suggest to then argue that the RBA should delay or abandon rate cuts. In fact, the opposite is true,” he said.
“The reality is that with global growth a worry, Australia needs to get its fundamentals for growth right – more business investment, better risk appetite, more innovation.”
An ongoing concern for the bank is the relative strength of the jobs market. There have been tentative signs that it may be easing, which would take pressure off inflation.
ACOSS chief executive officer Cassandra Goldie said the decision to hold rates ignored the reality playing out in the jobs market.
“The economic risk now lies with jobs, with unemployment having risen by 50,000 people just this calendar year,” she said.
“Since unemployment began to rise from 3.4 per cent in mid-2022, a total of 140,000 people have become unemployed. ”
While the bank announced its decision, credit ratings agency S&P Global said it would stick with its triple A credit rating for the Australian government in a move that will keep a lid on the interest paid on federal debt.
In a statement, the agency said “sound fiscal metrics” supported the rating which left Australia one of just 11 nations at triple A.
“The stable outlook on the long-term rating reflects our expectation that the general government deficit and net debt will remain modest over the next two years,” it said.
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