Governor Glenn Stevens said recent inflation data were in line with the bank's forecasts and that ''through to mid 2011, underlying inflation is likely to be in the top half of the target zone''.

''The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade. With growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain, the board judged this setting of monetary policy to be appropriate,'' he said this afternoon.

As expected, the board left the official cash rate at 4.5 per cent for the third straight month.

It comes after new figures show building approvals are going backwards and retail trade is softer than expected.

Australian Bureau of Statistics data published today found retail trade rose 0.2 per in June to a seasonally adjusted $20.184 billion, from a downwardly revised $20.146 billion in May.

Sales were up 0.8 per cent to $57.925 billion in the June quarter in volume terms.

The median market forecast was for sales to be up 0.4 per cent in the month and by 0.7 per cent in the quarter.

''Household Goods Retailing (1.3 per cent) recorded the largest seasonally adjusted increase in June followed by Department Stores (0.6 per cent), Cafes, Restaurants & Takeaway Food Services (0.6 per cent) and Other Retailing (0.3 per cent). Sales in Clothing, Footwear and Other Personal Accessory Retailing (-1.2 per cent) decreased in June after a strong result in May and Food Retailing (-0.3 per cent) also recorded a small decrease in sales,'' the bureau said.

The ACT had the second largest increase in retail trade, at 0.5 per cent.

Meanwhile, building approvals fell a seasonally adjusted 3.3 per cent to 13,267 units in June, from an upwardly revised 13,721 units in May. Economists had expected a 1.5 per cent rise.

''The value of total building approved fell 2.4 per cent in June in seasonally adjusted terms. The value of total residential fell by 5.5 per cent while non-residential rose by 4.4 per cent,'' the bureau said.

In trend terms, there was a 5.7 per cent increase in dwelling approvals in the ACT for a total of 410. This compares with a trend decrease of 2.7 per cent nationally.