As suspected by many, the Reserve Bank has left the cash rate unchanged at 4.25 per cent once again.

The RBA indicated the acute financial pressures on banks in Europe have been alleviated considerably. So while European countries will record very weak outcomes, the US economy is continuing a moderate expansion.

There has also been growth in China, which has been moderated as intended.

Looking at the local market, the Australian economy continues to suggest growth close to trend overall, with differences between sectors and considerable structural change.

Glenn Stevens, RBA governor, said recent information is consistent with the Reserve Banks’ expectations of the local and world economy.

“With growth expected to be close to trend and inflation close to target, the Board judged that the setting of monetary policy remained appropriate for the moment,” he said.