A COOLANGATTA academic has predicted interest rates will remain steady for the next year.

The prediction follows the Reserve Bank's decision on Tuesday to maintain the official cash rate at 4.75%.

Southern Cross University Business School head Professor Stephen Kelly said he expected the official cash rate to remain stable for the foreseeable future.

“They might go up by 0.25 or down by 0.25 over the next 12 months, (but) they're not going to move much more than that,” he said.

“For most people the stability is a good thing, they know what they can afford now.”

Prof Kelly said the current building slump was particularly bad for the Tweed economy due to its reliance on the industry.

“Now it generates so much employment, so much other work,” he said.

“All the building supply companies, all the plumbing supply companies ... are just sitting around twiddling their thumbs at the moment.”

And Prof Kelly predicted retail spending would probably continue to struggle.

“It's all about sentiment rather than what people have actually got in their pocket,” he said.

“Every small business person that I talk to (says) things are just quiet,” he said. “They haven't started laying people off, but they are starting to think about it.

“People just aren't spending money, it's as simple as that.”

Alex Warren, director of Mudgeeraba-based Mango Wealth Creation, said many people would welcome the RBA's decision.

“It's certainly a relief for a lot of people with mortgages and people in small business,” he said.

The RBA official cash rate has stood at 4.75% since November.

RBA governor Glenn Stevens said the board had considered whether recent data warranted a rates rise.

“On balance, the board judged that it was prudent to maintain the current setting of monetary policy, particularly in view of the acute sense of uncertainty in global financial markets over recent weeks,” Mr Stevens said.