RBA interest rates held steady as bank admits substantial uncertainty on outlook [Video]

Reserve Bank governor Michele Bullock has sought to kill off hopes of a pre-Christmas interest rate cut despite forecasting a sharp fall in headline inflation over coming months and an economy slowdown perilously close to a recession.

Following the bank board’s latest two-day meeting at which it held the official cash rate at 4.35 per cent, Bullock used a press conference to pour cold water on financial market expectations of a rate reduction at the RBA’s December meeting or even earlier.

Despite the bank now expecting economic growth to slow to just 0.9 per cent over the 12 months to June, revising down its forecasts for wage growth and tipping inflation to fall to 2.8 per cent by the middle of next year, Bullock said predictions of “near-term” rate cuts were overblown.

“So based on …