The Reserve Bank has left official interest rates at 2% – their lowest level on record – while the basic wage will increase modestly. Governor Glenn Stevens cited poor capital expenditure figures as a key concern, saying this trend was likely to continue.

He said while there were positive economic signs, such as the lift in home construction, the overall economy was still operating with a “degree of spare capacity for some time yet”. The decision followed the announcement by the Fair Work Commission to increase the minimum wage by 2.5% to $34,159 a year.