THE Reserve Bank of Australia has left cash rates unchanged at 4.75 per cent.

In a statement bank governor Glenn Stevens said: “Conditions in global financial markets have been very unsettled over recent weeks, as participants have confronted uncertainty about both the resolution of sovereign debt problems and the prospects for economic growth in Europe and the US.

“As a result, the outlook for the global economy is less clear than it was earlier in the year.

“Some temporary impediments that had contributed to a slowing in growth in some countries over recent months, such as the supply-chain disruptions from the Japanese earthquake and the dampening effects of rising commodity prices, are lessening.

“But the uncertainty and financial volatility is reducing confidence and may result in more cautious behaviour by firms and households in major countries.”

He said today’s meeting, the board judged that it was prudent to maintain the current stance of monetary policy.

“In future meetings, the board will continue to assess carefully the evolving outlook for growth and inflation,” he said.

Master Builders ACT executive director John Miller said earlier today that with the most recent Australian Bureau of Statistics data for both building approvals and housing finance having been in negative territory, it was imperative the central bank adopted a cautious approach with respect to any further tightening in monetary policy.

“All the data points to the Australian home building industry facing some of its greatest challenges over the next few months and we believe any further increase in interest rates would be highly ill-advised,” he said.

However, National Retail Association executive director Gary Black said business owners were looking to the RBA to cut rates in order to kick-start the most important part of the year.

“We welcome the decision to hold rates, but what the retail sector needs most is for the Reserve Bank to recognise that trading conditions are faltering, and to respond with a rate cut,” Mr Black said.

“Retailers desperately need a catalyst to shift consumers back to spending mode before Christmas.”