The Reserve Bank has left interest rates unchanged at 4.35 per cent, but the message from Governor Michele Bullock was hardly reassuring for borrowers. Despite softer inflation and a cooling housing market, the RBA is still warning that rates could need to rise again.

Sean Aylmer speaks with AMP Deputy Chief Economist Diana Mousina about why the decision was a “hawkish hold”, what could trigger another rate rise, why the RBA isn’t particularly worried about falling house prices, and the productivity problem it can’t fix.

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