Christmas is not likely to bolster the Reserve Bank this month with interest rates set to remain unchanged on Tuesday.
Comparison website RateCity’s analysis of 24 economic indicators has revealed a still-sluggish economy with no imminent signs of improvement.
If there was any doubt, the usually reserved RBA governor Philip Lowe spelt it out in a recent speech saying, “there is not a strong case for a near-term adjustment in monetary policy”.
RateCity money editor Sally Tindall said the household debt-to-income ratio, which is at a record high of 193.7 per cent, was weighing heavily on the RBA’s mind.
“Property prices might be softening, but a large number of Australians are carrying unreasonable levels of debt.
“We need to see some genuine growth in wages before households become robust enough to withstand a rate hike.
“Right now, it’s hard the see how people are getting ahead.
“While we won’t see a rate hike in the short term, if inflation starts to grow in the first half of next year, we may see a tightening of monetary policy before 2018 is out,” said Ms Tindall.
