In the first interest rate decision from the Reserve Bank of Australia (RBA) for 2022, the board decided to hold the official cash rate at a record low 0.1 per cent - a rate that has remained unchanged since November 2020.

While today’s call was largely expected, conjecture regarding the timing of future rate rises will intensify as we move throughout the year, although there appears to be widespread consensus that nothing will happen to official interest rates before the upcoming federal election, especially given the Omicron wave which has prompted state governments to provide billions of dollars in support packages for Australian businesses.

AMP’s Shane Oliver expects the conditions to change in the second half of 2022. "The economy is running stronger than expected, unemployment is likely to push below 4 per cent and this will drive an acceleration in wages growth to a 3 per cent greater pace in the second half - meeting the conditions for an RBA rate hike later this year,” Mr Oliver said.

Rick Maggi