The Reserve Bank has left interest rates untouched again, dashing cash-strapped borrowers’ hopes of a long-awaited cut.

Tuesday’s decision had been widely expected, following as-expected inflation numbers – although weaker data from the US that sparked this week’s global shares sell-off had ignited some speculation a cut might be on the way.

The Reserve Bank of Australia board has now held the official cash rate at 4.35 per cent since November.

Rates, which have been jacked up to tame inflation, are weighing heavily on mortgage holders, small businesses, first-home buyers and the economy as a whole.

A couple earning a combined $184,060, who maxed out their borrowing capacity to buy a home before rates starting rising in May 2022, could now be putting nearly 44 per cent of their before-tax income towards repayments.

The modelling by comparison website Canstar suggested another hike would nudge that figure higher to 45 per cent, leaving very little leftover to cover living costs.

Before Tuesday’s announcement, the Australian Council of Social Service called on the RBA to start cutting interest rates, with the balance of risks swinging towards a surge in unemployment and recession.

Worries of a recession in the US further added to the narrative of a global economy cooling in response to higher interest rates.

World markets steadied, and even rallied somewhat, on Tuesday after a mass selloff on Monday.

Japanese stocks jumped at the open, soaring more than 8 per cent to above 34,000 in the opening minutes of trading on Tuesday, rebounding sharply from its 31,458 close on Monday. The index had plummeted 12.4 per cent in its worst selloff since the 1987 Black Monday crash.

Wall Street also looked steadier with S&P 500 futures rebounding 0.9 per cent in early trade, while Nasdaq futures rose 1.2 per cent. The S&P 500 had lost 3 per cent over Monday, with the Nasdaq Composite down 3.43 per cent.

The ASX was also up ahead of the Reserve’s announcement. The benchmark S&P/ASX 200 Index rose 0.4 per cent, or 31.2 points, to 7680.6 just after 2pm Tuesday.

Our latest Statement on Monetary Policy, which sets out our assessment of current economic and financial conditions as well as the outlook that the Reserve Bank Board considered in making its interest rate decision, has been released today: https://t.co/v8Pr7zxsf4

— Reserve Bank of Australia (@RBAInfo) August 6, 2024

Forecasters eye downward move

Inflation remains above the RBA’s bank’s 2 to 3 per cent target range and has accelerated recently, rising from 3.6 per cent annually in the March quarter to 3.8 per cent in June.

Still, economists are broadly of the view that June quarter inflation data was not strong enough to warrant another hike on Tuesday.

Four in five economists and experts surveyed by Finder anticipated the cash rate staying unchanged at 4.35 per cent in August.

Most forecasters now expect the next move to be down although they differ on the timing.

Of the major banks, Commonwealth Bank and Westpac predict a November start, ANZ in February and National Australia Bank a May commencement for easing.

ANZ head of Australian economics Adam Boyton said the RBA was unlikely to give any hints about the likely timing of its first cut, instead sticking with its “not ruling anything in or out” line on future moves.

The bank is also expected to release refreshed economic forecasts on Tuesday.

Boyton said “large revisions” to headline inflation were likely to reflect energy rebates and other government policies. That will mean lower price forecasts that will lift again as supports expire.

-with AAP