The Governor of the RBA has announced that the cash rate will remain at 2.5% again this month. The rate has been unchanged since it was lowered from 2.75% in August 2013 and it is expected they will remain at this record low for at least a few more months.

This is good news for anyone with a mortgage but will be taking its toll on many retirees, who are relying on the interest on their savings to fund their living expenses.

“Growth in the global economy is continuing at a moderate pace. China’s growth has generally been in line with policymakers’ objectives, though some data suggest a slowing in recent months. Weakening property markets there present a challenge in the near term. Commodity prices in historical terms remain high, but some of those important to Australia have declined further in recent months.

Volatility in some financial markets has picked up in recent weeks. Overall, however, financial conditions remain very accommodative. Long-term interest rates and risk spreads remain very low. Markets still appear to be attaching a low probability to any rise in global interest rates or other adverse event over the period ahead.

In Australia, most data are consistent with moderate growth in the economy. Resources sector investment spending is starting to decline significantly, while some other areas of private demand are seeing expansion, at varying rates. Public spending is scheduled to be subdued. Overall, the Bank still expects growth to be a little below trend for the next several quarters.” – excerpt from RBA Media Release, 7th October 2014

For the full statement from Glenn Stevens, click here

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