Rising fuel prices will keep a lid on consumer spending for some time, slowing economic growth. The central bank will keep interest rates on hold.

This is exactly what the Reserve Bank wants because increased investment reduces inflationary pressure and will help build capacity.

The bank is concerned about inflationary pressure in the economy given the strength in the global economy and higher commodity prices. It will be a knock on the head for both retail and housing.

Slowing housing, weak consumer spending and benign underlying inflation give the bank plenty of reasons to leave interest rates right where they are. Fuel prices are up, but thanks to an extremely competitive retail environment and cheap imports, prices for a whole range of items remain weak.