The Central Bank kept the country’s official interest rate steady at 4.35 percent and warned that returning inflation to target was still a priority.

“Returning inflation to the target in a sustainable manner within a reasonable time frame remains the board’s top priority,” the bank’s board of directors said in a statement.

“While headline inflation has fallen significantly and will remain low for some time, headline inflation is more indicative of inflation momentum and remains very high.

“November (RBA) forecasts suggest that it will take some time for inflation to sustainably reach the target range and approach the midpoint.

“This reinforces the need to remain alert to upside risks to inflation and the board is not making any upside or downside decisions.”

The official interest rate had remained unchanged at 4.35 percent for a full year before today’s meeting.

Markets had predicted that the chance of a rate cut overnight would be only 5 percent.

VanEck chief investment officer Russel Chesler said investors were pretty much on the same page about what the RBA would do at its November meeting.

“The Australian economy has proven quite resilient to downward pressures, but we are encouraged to see slow but steady progress in reducing the inflation rate,” Mr Chesler said.

On Monday Judo Bank chief economic adviser Warren Hogan said the RBA would likely not change interest rates until late 2025.

“We now expect the RBA to remain on a ‘long hold’ throughout next year,” Mr Hogan said.

“With inflation remaining above the RBA target and the labor market being beyond full employment, we see no compelling reason for a rate cut.”

The RBA has made significant progress in the fight against rising prices; Core inflation fell by 0.5 points to 3.5 percent by September.

Headline inflation fared better, falling to 2.8 per cent in the bank’s target range, thanks to large Government subsidies. However, the RBA will ignore the temporary effects of these policies.

The International Monetary Fund has warned in recent weeks that Australia could lag behind the pack in the fight against inflation, predicting prices will rise 3.3 per cent next year.

Unemployment remains near record lows as the job market lights dim; More than 430,000 workers were hired last year.