The Reserve Bank of Australia has held the cash rate steady for the fourth consecutive month, but a recent uptick in inflation has left the door open to another hike before Christmas.

Delivering her first interest rate decision as RBA governor since taking over from Philip Lowe last month, Michele Bullock said the board held the official cash rate steady at 4.1% in October, where it’s remained since June.

However, Ms Bullock didn’t rule out further rate hikes in the months ahead after rising fuel, rent and services costs pushed annual inflation back above 5% in August.

“Inflation in Australia has passed its peak but is still too high and will remain so for some time yet,” Ms Bullock said.

“Timely indicators on inflation suggest that goods price inflation has eased further, but the prices of many services are continuing to rise briskly and fuel prices have risen noticeably of late.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks.”

Price movements can be volatile from month to month. When stripping out some products with big price swings – such as petrol, fruit and holiday travel – the Australian Bureau of Statistics said inflation actually eased during the month.

PropTrack senior economist Eleanor Creagh said inflation is expected to continue moving lower amid weakening household consumption and slowing economic activity.

“The full impact of monetary tightening to date is yet to be felt and we’re likely to continue to see inflation moving lower as a result,” Ms Creagh said.

“The significant increase in mortgage servicing costs, together with cost-of-living pressures, has seen consumer spending slow and weigh on economic activity. Conditions are expected to further soften in the coming months.

Ms Creagh said the decision to hold the cash rate steady again will underpin buyer and seller confidence for the spring selling season.

“Looking ahead, interest rates have very likely peaked and population growth is rebounding strongly,” she said.

What can you do?

Home loan volumes are generally lower in most states. That means some lenders have special offers to attract new customers. A home loan refinance is probably easier than you think and could save you  $1,000’s each year and help with your cash flow.

Some options we can help you explore include refinancing (which could involve increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.

If you’re keen to switch and save, get in touch with one of our local specialists today. Understanding your options can start with a simple phone, web, or in person discussion.

Check out our guide on home loan refinancing!

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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.