With inflation risks still running high, the Reserve Bank of Australia has been reluctant to drop its tightening bias. However, we still expect the Board to leave rates on hold at its upcoming August meeting. For one thing, curbs on migration should soon feed through to slower population growth, helping to ease pressures on capacity. For another, timely data suggest that household spending growth slowed sharply last quarter. And we suspect it will remain subdued in the near term.
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