Reserve Bank holds interest rates at 3.6%

The increase comes amid a sharp increase in inflation, however Chief Economist at the Australia Institute, Greg Jericho, highlighted that was mostly due to the end of state-based energy rebates.

“Unsurprisingly the Reserve Bank has chosen to keep rates steady at 3.6% This reflects that yet again the RBA care more about inflation than maintaining full employment,” Mr Jericho said.

“In response the RBA has shown it is less worried about ongoing rising unemployment than reacting to a surprising blip in inflation.”

Mr Jericho said the rate hold shows the RBA cares more about inflation than jobs.

“In order to keep unemployment from rising further that RBA must care as much about the full employment part of its dual mandate as it does inflation,” he said.

While the RBA’s decision to leave interest rates was no surprise, it is still a huge disappointment for mortgage holders at a time when key indicators show so many Australians are struggling.

“The most recent household spending figures released yesterday showed households are slowing their spending and shifting towards spending on necessities,” Mr Jericho said.

After the RBA’s September decision, which was also to hold rates, Mr Jericho said the RBA had  “once again chosen to be content with rising unemployment.”

“For those Australians forced to live in poverty on Jobseeker, this is a very cruel decision,” Mr Jericho said in September.

The RBA’s next Monetary Policy Decision Statement will be on December 9 at 2:30pm AEDT.