RBA leaves the cash rate on hold to commence 2024
Key points
- Interest rate hikes are on pause for February
- Monthly Consumer Price Index (CPI) indicator is at 4.1%, a drop from 5.4% in September
- Stay on top of your financial wellbeing – check your credit score
Interest rate remains stable
Over the holiday season, inflation declined and unemployment climbed, making it no surprise for the nation’s official interest rate to be held stable at 4.35%.
It’s important to note that the rise of unemployment does not have to be at the cost of individuals losing their jobs; all that is required is for job growth to be slower than the increase of the working age population.
December measure of inflation surprises the Reserve Bank of Australia (RBA)
The monthly Consumer Price Index (CPI) indicator came in at 4.1% in December. This is a two-year low in the December quarter and materially lower than RBA’s predictions.
The most significant contributors to December’s surprising CPI were housing (+5.2%), food & non-alcoholic beverages (+4%) and health (+4.8%).
The RBA said that “to date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.”
What is the forecast for 2024? How will this impact my credit score?
While economic trends don't change how credit scores are calculated, if you can’t meet rising repayments, it could impact your credit score.
Below are the top 3 economic predictions made by the big banks for Australia in 2024.
- The cash rate will start to decline from September 2024 onwards, as inflation comes back into the RBA’s 2 – 3 per cent target range.
- The unemployment rate will move up to 4.5% by the end of the year.
- The national home prices will lift by 5% over 2024.