Economy on edge despite interest rate pause

Workers walk past the Reserve Bank of Australia building in Sydney. Source: AP / Rick Rycroft/AP

The federal government says it will not introduce new cost of living measures, despite a $19 billion budget surplus. Meanwhile, the decision to pause interest rates isn't expected to provide much relief to struggling households, as the cash rate remains at the highest level in 11 years.

Interest rates have remained at 4.1 per cent, but it's come with a warning - any relief is temporary.
Inflation is tracking at 5.6 per cent, which is the lowest in the past year - but still well above the target range of 2 to 3 per cent.
While many family budgets are tight, there's an unexpected federal surplus of $19 billion due to high employment and strong commodity prices.