The Reserve Bank of Australia has left interest rates on hold at 7.25%, saying past interest rate rises were starting to slow the economy.
“While labour market conditions to date have remained strong, indicators of household spending have recorded subdued outcomes over recent months, and credit expansion to both households and businesses has weakened significantly,” RBA governor Glenn Stevens said in a statement.
The bank says that while inflation is likely to main relatively high in the short-term, it should decline over time as demand cools.
“Should demand not slow as expected, or should expectations of high ongoing inflation begin to affect wage and price setting, that outlook would need to be reviewed,” Stevens said.
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