"With inflationary pressures persisting, today's decision by the Reserve Bank Board to hold the cash rate at 4.35 per cent will continue to see Australia's weak economy constrained by high interest rates," Innes Willox, the chief executive of the national employer association, the Australian Industry Group, said.
"Mortgage payments and business loan servicing costs will continue to dampen spending as well as business activity and investment.
"With the economy barely growing at all and some parts in contraction, there is a clear risk of a much sharper deterioration in the labour market and the broader economy in the period ahead than is generally expected.
"It is critical that all parties, employees, businesses and governments exercise restraint in price setting, wage negotiations and spending decisions.
"Doing this is essential to reduce the inflationary pressures businesses and households are facing," Mr Willox said.
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