Business hopes that interest rates will stay steady well into next year given their gloomy view of the economy.

Bosses are feeling more upbeat about their businesses than they have in a long time.

But lingering doubts about the broader economy suggest interest rates may have to remain stable well into next year.

The Reserve Bank left the cash rate at an all-time low of 2.5 per cent at Tuesday’s monthly board meeting.

The last change was in August 2013.

Central bank governor Glenn Stevens believes a period of stability is “prudent” to foster sustainable growth in demand and keep inflation within its two to three per cent target band.

Mr Stevens still expects it will take time for the unemployment rate to decline consistently, noting the recent unusual volatility in the employment figures.

He also said the currency was historically high given the recent fall in commodity prices, despite its recent fall to a four-year low against a strengthening US dollar.

“It is offering less assistance than would normally be expected in achieving balanced growth in the economy,” Mr Stevens said in a statement.

Business will be hoping interest rates remain low for as long as possible.

“We are pretty confident that they will stay at the current rate well into next year,” Australian Chamber of Commerce and Industry chief Kate Carnell told reporters in Canberra.

The chamber’s latest survey of investor confidence found respondents were happier about conditions, sales and profits in their own businesses in the September quarter.

Owners are also positive about the next three months, while indicating they are getting closer to the point where they expect to expand through hiring and investment.

“These are the best figures we have seen for quite a long time,” she said.

But respondents aren’t seeing the whole of the Australian economy quite as rosily as their own business.

They expect economic growth and investment will weaken, that the unemployment rate and inflation will rise and wages growth will continue to fall.

She blamed the impasse in the Senate over a number of budget saving measures for this gloom.

“There is no doubt that businesses want to see a balanced budget,” she said.

However, the latest weekly Essential Research online poll found only 39 per cent of respondents thought the government was doing a good job managing the economy compared to other countries.


* Own business conditions index up at 52.6 points in September from 49.4.

* The index had been below the 50-mark, that separates expansion from contraction, for three quarters.

* Own business expected conditions index rises to 58.0.

* Sales at 50.8, first time above 50 since December quarter 2010.

* Profitability rises for second consecutive quarter to 48.4 from 45.7, having been below 50 since the global financial crisis.

* National economic conditions at 46.3 versus 44.2 previously.

* Climate for investment index 39.4 – below 40 since mid-2011.

* Expected GDP growth index at 47.8.