The Reserve Bank of Australia (RBA) has again stayed its hand on cash rate rises, with the June figure of 4.1% remaining unchanged.

Today's decision gives struggling households a second, consecutive month of relief and is only the third time in 15 months such relief has occurred.

Households have now experienced a 4% spike in cash rates since May 2022.

As he did in his July monetary policy announcement, outgoing RBA governor Dr Philip Lowe commented he was pleased that high interest rates were resulting in a more sustainable balance between economic supply and demand.

But even the news inflation eased to 6% in the June quarter - down from 7% in the March quarter and the second consecutive quarter of lower annual inflation - is still too high to please the RBA's target figure of 2%-3%.

In short, the RBA's state of play is to continue to increase the cash rate.

"Returning inflation to target within a reasonable timeframe remains the Board’s priority," Dr Lowe repeated again today.

"Inflation expectations consistent with the inflation target"

The predicted date of when inflation will reach 2%-3% has now been pushed forward to late 2025, or six months later than forecast in Dr Lowe's May announcement.

Dr Lowe also said in his May announcement that he expected inflation to hit 4.5% this year.

"The central forecast is for CPI inflation to continue to decline, to be around 3.25% by the end of 2024, and to be back within the 2–3% target range in late 2025," Dr Lowe said today.

He added that to date, medium-term inflation expectations had been consistent with the inflation target and it is important that this remains the case.

Dr Lowe remains uneasy about the continued tight state of the labour market and the 3.5% unemployment rate, which is hovering around a 50-year low.

However, he was happier about wage growth increasing in response to the tight labour market and high inflation.

"The unemployment rate is expected to rise gradually from its current rate ... to around 4.5% late next year," he said.

"At the aggregate level, wage growth is still consistent with the inflation target, provided that productivity growth picks up."

Significant uncertainties for the RBA include persistent services price inflation; lags in monetary policy operations; and firms’ pricing decisions and wages in response to a slowing economy.

Dr Lowe also pointed to the major uncertainty of household consumption and the "painful squeeze" they were experiencing, thanks to a combination of cost-of-living pressures and higher interest rates.

But he ended today's announcement by warning households of the potential for more such pressures in the future.

"The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that," he said.

"Sheer uncertainty in the economy"

CoreLogic executive research director, Tim Lawless agreed with most economic pundits in saying that another rate hike can’t be dismissed.

At the same time, he said economists were disagreeing on whether inflation had passed its peak or how many - if any - rate hikes we could see in the future.

"The range of cash rate forecasts reflects the sheer uncertainty in the economy," Mr Lawless said.

"(And) the RBA itself has once again left the door open for rate hikes."

Mr Lawless advised home owners to examine the RBA's quarterly Statement on Monetary Policy to be published this Friday, as it will offer more details on the central bank's economic perspectives.

He also remained quietly confident that today's decision to pause cash rate rates was a positive one as it would lift both consumer sentiment and housing activity.

And with the traditionally busy spring selling season just around the corner, such confidence and activity can't come soon enough.

"Recession-like lows .. have persisted over the past nine months (and) when sentiment is low, home sales are low and vice versa; so, any lift in sentiment is likely to be accompanied by a rise in active buyers and sellers," Mr Lawless said.

The RBA's next monthly cash rate announcement will be on Tuesday, September 5, 2023, at 2.30pm AEDT.

Dr Lowe will announce any changes to the cash rate for the final time before Michele Bullock begins a seven-year governor term at the RBA on September 18.

Ms Bullock will oversee the recommendations of this year's Review of the Reserve Bank of Australia, including the creation of a specialist monetary policy board (MPB), which will deal exclusively with monetary details, including setting interest rates.

To explore your home loan options and to be on the front foot for any future rate rises, get in touch with one of our home loan experts today.