It’s the third consecutive month without movement in the national interest rate, with previous hikes “working to establish a more sustainable balance” according to Lowe.

It comes after Australians were whacked with four percentage points of rate hikes since May last year, leading to dearer mortgage repayments and tighter purse strings.

The latest pause has spared the typical homeowner another $78 increase in monthly repayments on a $500,000, 25-year home loan.

The last rate rise was in July – at the time the 12^th since May 2022 – as the Reserve Bank attempted to rein in inflation amid disappointing wage growth.

Lowe today said a balance needed to be struck between supply and demand in the economy.

“In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month,” Lowe said in his last monetary policy decision statement as governor.

“This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook.”

He said inflation in Australia had passed its peak, but that it was still too high.

“While goods price inflation has eased, the prices of many services are rising briskly. Rent inflation is also elevated,” he said.

“The central forecast is for CPI inflation to continue to decline and to be back within the 2–3 per cent target range in late 2025.”

Lowe said that high inflation was weighing on people’s real incomes and consumption growth was weak.

“Returning inflation to target within a reasonable timeframe remains the Board’s priority. High inflation makes life difficult for everyone and damages the functioning of the economy. It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and worsens income inequality,” he said.

“And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment.

“To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.”

The outgoing governor also said there were “significant uncertainties” around the RBA’s outlook.

“Services price inflation has been surprisingly persistent overseas and the same could occur in Australia. There are also uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages respond to the slower growth in the economy at a time when the labour market remains tight,” Lowe said.

“The outlook for household consumption also remains uncertain, with many households experiencing a painful squeeze on their finances, while some are benefiting from rising housing prices, substantial savings buffers and higher interest income.

“And globally, there is increased uncertainty around the outlook for the Chinese economy due to ongoing stresses in the property market.”

Future rate hikes were not ruled out, which “may be required to ensure that inflation returns to target in a reasonable timeframe”.

The decision to hold the interest rate follows data published by Roy Morgan last week showing that 1.5 million mortgage holders were “at risk” over the three months to July – a record high, with 640,000 more households in stress than they were this time last year.

It also comes as inflation is falling faster than anticipated, with monthly figures published last week by the Australian Bureau of Statistics demonstrating a bigger-than-forecast decline.

The RBA announced Lowe’s successor in July, with Michele Bullock to take the governor role from 18 September.