By Greg Peel

As Australia's economic data have bounced around recently and global issues have created uncertainty, economists have to-ed and fro-ed with their expectations of the timing of another RBA rate rise. Throughout this period the RBA has remained largely hawkish, although today some cracks have begun to appear. The cash rate was left on hold today as expected at 4.75%, but it's beginning to look like August may not see a hike either.

To follow the progress of the RBA's mood it is best to compare interest rate decision statements from one month to the next.

In June the RBA suggested the global economy is continuing its expansion. Today it suggested the same, adding "but the pace of growth slowed in the June quarter". This slowing, the chairman notes, is due to supply chain disruptions following the Japanese earthquake, easing but still high commodity prices, and sovereign debt problems in Europe.

"A key question," the RBA offers, "is whether this more moderate pace of growth will continue". The question was not posed in June. And "key" to what? RBA monetary policy, one presumes.

In June the RBA noted Australia's terms of trade "are reaching" very high levels. In July they are "now at" very high levels, "though conditions vary significantly across industries". This is the most clear acknowledgment to date from the RBA of Australia's two-speed, or multi-speed, economy, given to date the bank has compared only weak household spending.

In June the RBA noted the recovery of the coal industry from the floods was taking a bit longer than first assumed but suggested there would be a mild boost from the broader rebuilding effort in affected areas. Today the RBA notes the coal recovery continues to move at a slower pace than expected and reiterates the mild, broader boost, but adds "growth through 2011 is now unlikely to be as strong as earlier forecast".

On the matters of strong employment growth and modest credit growth the RBA's view remains unchanged. But the central bank's view on inflation has taken a subtle turn.

In June the RBA acknowledged the price spike sparked by extreme weather events earlier in the year but suggested that once these temporary shocks dissipate, CPI inflation will be close to target over the next 12 months. The bank says exactly the same thing this month but adds: "In underlying terms, inflation has been in the bottom half of the target range, though a gradual increase is expected over time".

A "gradual" increase? What are you trying to tell us Glenn?

Both the June and July statements ended with the conclusion: "At today's meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate. In future meetings, the Board will continue to assess carefully the evolving outlook for growth and inflation."

Many economists have been betting on August as the date for the next rate rise ? the one needed to head off resource sector led inflation ? although recent mixed data has had others backing further out, even to 2012. On the strength of the July statement, and particularly the "gradual" comment, an August rate rise is looking a lot less likely. The June quarter CPI result will be in by then but it seems like the RBA has decided it won't be as strong as first assumed.

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