Australian families have been spared another painful interest rate hike in October, with the Reserve Bank extending its pause into a fourth month.

Central bankers decided to leave the cash rate target at a decade high 4.1 per cent on Tuesday in a move that came as no surprise to experts.

New RBA governor Michele Bullock reiterated most of the guidance of her predecessor Philip Lowe, saying that while inflation remains too high it has peaked and is still expected to fall back to target by late 2025.

“Inflation is coming down, the labour market remains strong and the economy is operating at a high level of capacity utilisation, although growth has slowed,” Bullock said in a statement on Tuesday.

The ongoing pause is welcome news for millions of families hit hard by rate hikes since May 2022, which have added more than $1100 to monthly repayments on a typical $500,000, 25-year home loan.

Treasurer Jim Chalmers welcomed the October hold on Tuesday.

“Australians are doing it tough enough already because of the interest rate rises,” he said.

“We want to see people being able to service their mortgages and provide for their loved ones.”

But central bankers have left the door open to another rate hike, saying there are a range of uncertainties in the economic outlook, including how prices for services change and how quickly consumption growth slows.

“The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome,” Bullock said.

Open Home Loans chief Samual Philipos cautioned that rates remaining on pause wasn’t necessarily a good thing for homeowners though, because it didn’t mean their mortgage repayments would fall (which requires a cut).

“With the interest rate not moving, we’re essentially going to be living in this cost-of-living crisis unless something monumental changes that the RBA can’t affect, like lowering fuel prices,” he said.

Economists had expected another pause this month, despite recent rises in petrol prices sparking fears that price growth is starting to pick up again.

The expectation was that central bankers would look through the bowser squeeze and concentrate instead on the slowing economy, with inflation set to ease back into the RBA’s 2-3 per cent target range by late 2025.

Deloitte Access Economics head Pradeep Phillip said households and businesses would breathe a “collective sigh of relief” at the pause.

“Although inflation was slightly higher in August than it was in July, that increase was driven by an increase in the cost of more volatile items like fuel, energy, and holiday travel,” he said.

“If you exclude these items, underlying inflation in the year to August was lower than it was in the year to July.”

Indeed APAC economist Callam Pickering said it was unlikely the cash rate target would change until next year as inflation continued to moderate.

“Tighter policy has curbed consumer behaviour, with retail volumes now falling for three consecutive quarters,” he said.

“There is clear evidence that monetary policy is having the intended impact on the Australian economy.”

PropTrack senior economist Eleanor Creagh said the ongoing rate pause would underpin strength in property markets over spring, with prices in major capitals already headed back towards previous peaks rapidly.

Interest rates have very likely peaked and population growth is rebounding strongly,” she said.

“Together with a shortage of new home builds, prices are expected to rise and more markets will likely reach new record levels after recouping last year’s fast falls.”

CoreLogic research director Tim Lawless said the RBA would keep a “close eye” on the housing sector, particularly as rents continued to rise.

“The annual change in CoreLogic’s measure of market rents has been slowing since October last year,” he said.

“CPI rents tend to lag market rents, implying CPI rental growth could be close to peaking.”