RBA's Lowe upbeat but no clue on rates

While many economists have been talking up the risks of higher interest rates in the months ahead, the Reserve Bank has yet to show its hand.

The central bank left the cash rate at it record low 1.5 per cent following its monthly board meeting on Tuesday - a rate that has stood since August last year.

Reserve Bank governor Philip Lowe's post-meeting statement maintained the upbeat tone of his recent speeches but gave no clue as to when borrowers could expect higher lending rates.

Financial markets are predicting the cash rate to rise to 1.75 per cent by August next year.

Dr Lowe acknowledged the 0.8 per cent expansion in economic growth during the June quarter, the first opportunity the board had had to respond to the most recent national accounts.

"This outcome and other recent data are consistent with the Bank's expectation that growth in the Australian economy will gradually pick up over the coming year," Dr Lowe said.

He noted employment has continued to grow strongly over recent months and how various forward-looking indicators point to further solid growth ahead.

While job advertisement figures released on Tuesday showed a flat result for September, this followed six straight months of increases and still stand 12.5 per cent higher than a year ago.

Separate data over the past couple of days also backed the governor's view that the previous hotspot of the Sydney housing market is coming off the boil.

Building approvals in NSW fell almost 10 per cent in August, a day after data showed Sydney prices declined for the first time in 17 months in September,

Approvals across the country rose 0.4 per cent, but were still 15.5 per cent down on the year.

Dr Lowe says business conditions are at a high level but against this, slow growth in wages and high levels of household debt are likely to constrain growth in household spending.

Such contrasting thoughts were borne out by two surveys on Tuesday.

Debt recovery firm Prushka found two-thirds of small and medium-sized firms are confident about business conditions, up from 45 per cent when surveyed 12 months ago.

"This level of confidence is surprising in the current economic climate," Prushka chief executive officer Roger Mendelson said.

In contrast, the weekly ANZ-Roy Morgan consumer confidence index eased 0.6 per cent, its second consecutive week of decline, to remain only just above its long-term average.