The Reserve Bank of Australia kept the official interest rate on hold this afternoon at 4.75%, with governor Glenn Stevens saying mortgage lending rates are now just above average given the banks’ decisions to raise interest rates above the cash rate.

In a brief statement, Stevens said that while European debt concerns have once again brought pessimism into financial markets, both China and India are expanding and the United States is recording modest growth.

But Stevens noted domestically, household spending is low and “there continues to be a degree of caution” among consumers.

“Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend.”

Stevens also cited employment growth, which he said is likely to moderate over the rest of the year, although a “further increase” in wages growth is said to be likely over the coming year.

Stevens noted that the high Australian dollar should keep inflationary pressures down over the foreseeable future. Inflation is expected to be “little changed… though it is likely to increase somewhat over the medium-term if the economy grows as expected”.

“Following the Board’s decision last month to lift the cash rate, and the subsequent increases by financial institutions, lending rates in the economy are now a little above average. The Board views this setting of monetary policy as appropriate for the economic outlook.”

The article first appeared on Smart Company.