According to AMP’s chief economist Shane Oliver, the nation’s economic data over the last couple weeks has been generally soft, with a slight fall in home sales and house prices, a fall in building approvals and continuing soft growth in private sector credit.

“As a result of this data, we remain of the view that tightening will not become aggressive,” Mr Oliver said.

Mr Oliver also said that the recent floods would further delay the next RBA tightening as Australia struggles to get its fresh fruit and vegetable industry back on track.

“While the floods will likely lengthen the soft patch in Australian economic growth and further delay the next RBA tightening, possibly to May or June, they are unlikely to have a significant impact on growth this year as a whole, which we expect to be around 3.5 per cent over the year to the December quarter. At this stage, we still see the cash rate rising to 5.5 per cent by year end.”