No rate rise until 2024, while RBA continues to demand stringent lending standards

The economic recovery in Australia has been stronger than expected and is forecast to continue, according to the Reserve Bank of Australia which again affirmed it will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.

"For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently.

"This is unlikely to be until 2024 at the earliest," the board advised today.

CommSec senior economist Ryan Felsman noted it has been five ears since annual underlying inflation has been in the Reserve Bank’s target zone.

"Previously forecasting higher inflation was enough to trigger interest rate hikes .....not anymore," he said.

The RBA did note housing markets have strengthened further, with prices rising in all major markets.

"Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers.

"Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained."