Join us for rolling coverage of the RBA’s official cash rate announcement along with expert commentary from economists and everything you need to know from Michele Bullock’s press conference immediately following the announcement.
RBA warns the economy is ‘at risk’
12.47pm
This afternoon’s cash rate decision comes a week on from RBA governor Michele Bullock’s appearance in Canberra in front of the House of Representatives’ Standing Committee of Economics.
Ms Bullock was largely positive when recapping Australia’s progress in curbing high inflation and the nation’s move into a sustained period of lower inflation. Despite this, she suggested the board’s outlook for Australia’s economy is weakening “the further into the future we look”.
The comments follow continuing international market volatility off the back of geopolitical tensions in Europe and the Middle East, as well as the fallout from the introduction of global tariffs by the United States.
Read more: RBA says Australian economy is at risk despite its strength[1]
Cut, hold, cut, hold, cut…?
12.29pm
September marks seven months since the RBA began its first rate cutting[2] cycle in more than four years.
Since that welcome relief for Aussie homeowners and borrowers, the bank has yo-yoed between holding the cash rate steady and cutting it. Cuts of 0.25% in February, May and August were interspersed with rate holds in April and July.
While it may feel like things are moving more slowly than anticipated at the start of the year, the approach aligns with the RBA’s plans to gradually provide easing while inflation softens.
Based on this pattern, we’re in line for a hold… but the RBA doesn’t make decisions based on patterns.
Inflation uptick concern
12:13pm
The latest Consumer Price Index (CPI) monthly indicator last week showed headline inflation jumped to 3.0% in August.[3] That is right at the top of the RBA’s desired 2-3% target range where it has been fighting to keep inflation since Covid.
While the bank has been expecting a small rise in headline inflation to coincide with electricity rebate roll offs, the latest data marks the highest annual inflation rate seen in 13 months.
The bank’s preferred figure is trimmed mean inflation, which strips out the effects of one-off and volatile price movements. It rose slightly to 2.7% in August but is still in target.
Read more: RBA rate hike on cards after inflation shock[4]
Welcome to our live blog
12.01pm
Thank you for joining us today for this live coverage of the Reserve Bank of Australia’s (RBA) next cash rate decision, which is expected at 2:30pm.
We’ll be bringing you all the latest forecasts and updates over the afternoon while we wait to hear whether the cash rate will remain at 3.60% or be lowered for a fourth time this year.
If another 0.25% cut is confirmed, it will result in the lowest rate Australia has seen since early 2023. It will also mark the highest number of rate cuts Aussies will have seen in one calendar year since 2012.
RBA governor Michele Bullock will announce whether interest rates will drop again. Picture: Monique Harmer
References
- ^ RBA says Australian economy is at risk despite its strength (www.mortgagechoice.com.au)
- ^ RBA began its first rate cutting (www.realestate.com.au)
- ^ headline inflation jumped to 3.0% in August. (www.mortgagechoice.com.au)
- ^ RBA rate hike on cards after inflation shock (www.realestate.com.au)