RBA leaves cash rate on hold for October at 1.50 per cent.

The Reserve Bank has left the official cash rate on hold at its historic low of 1.5 per cent for the 14th month in a row. The decision to hold at October’s board meeting was widely predicted by economists and experts, with most predicting rate rises some time in the middle of next year or later. Concern around the growth in housing debt appears to remain a key reason for the RBA not raising rates.

Dr Lowe said business conditions were good, and noted a large pipeline of infrastructure investment. “Against this, slow growth in real wages and high levels of household debt are likely to constrain growth in household spending,” he said. “Growth in housing debt has been outpacing the slow growth in household incomes for some time.”

Dr Lowe said growth in investor borrowing has slowed following the introduction of supervisory measures by the Australian Prudential Regulation Authority.

He also noted there have been further signs of cooling property prices in Sydney.