Stretched borrowers have been spared further mortgage pain with the Reserve Bank board leaving interest rates on hold at 4.1 per cent.

The October decision marks the fourth month on the sidelines after an intense series of interest rate hikes.

The call was broadly expected despite inflation bumping higher in August.

The meeting was the central bank’s first under the leadership of new governor Michele Bullock, who took over from Philip Lowe last month.

In a statement following the meeting on Tuesday afternoon, Ms Bullock kept the door open to more increases if needed.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks,” she said, in language unchanged from the previous meeting.

“In making its decisions, the board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market.”

A worrying set of inflation numbers in the monthly consumer price index have upped the chances of another hike before the end of the year, several economists warn.

The headline number lifted 5.2 per cent annually in August, driven higher by rising fuel prices from 4.9 per cent in July.

In the post-meeting statement, Ms Bullock noted the evolving inflation profile.

“Timely indicators on inflation suggest that goods price inflation has eased further, but the prices of many services are continuing to rise briskly and fuel prices have risen noticeably of late.”

The quarterly inflation numbers are due later in the month and will offer a more comprehensive update on price movements.

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said upside risks to inflation continue to cloud the outlook.

“The recent spike in oil prices presents a new upside risk to headline inflation, while rising unit labour cost growth continue to threaten the timely return of inflation to target,” he said.

But he said the RBA’s own forecasts, which have inflation returning to the two to three per cent target by late 2025, were still looking plausible at this stage.

“With the full impact of rate hikes to date yet to be felt, we expect the RBA will keep rates on hold for the next year,” the economist said.

Borrowers are already feeling the 12 hikes fired off by the RBA, which began lifting interest rates in May 2022.

Record numbers of borrowers have been deemed at risk of mortgage stress based on a Roy Morgan survey – a categorisation that takes into account monthly repayments as a percentage of income and spending.

More than 30 per cent of mortgage holders, or 1.57 million, were in this at-risk category over the three months to August.

Source: AAP