Rate cut relief for millions of Aussies is much further away than expected now, all four big banks agree.

Homeowners’ hopes of rate relief for Christmas have been crushed, with Australia’s biggest banks killing all chance of further cuts for much longer than expected.

Fresh analysis by Bendigo Bank chief economist David Robertson, issued Thursday, warned mortgage holders will face another six months of financial pain, joining Commonwealth Bank, Westpac, and NAB in pushing back rate relief.

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Housing was one of the biggest risers in latest CPI data. Picture: Nigel Hallett

“There is still an expectation of lower rates ahead, but the latest inflation numbers were a setback. This has pushed back the next RBA cash rate cut by around six months – most likely to around May next year,” Mr Robertson said.

CBA, Westpac, and NAB don’t see any move downwards in the near term, ruling out early 2026. NAB predicts the next cut will be in May, with only ANZ leaving the possibility of a February 2026 cut – though it has low confidence on that.

A “deeper cutting cycle” is now also potentially off the cards.

“It’s still very likely that we get another cut to 3.35 per cent, taking us 1 per cent below last year’s peak, but the case for a deeper easing cycle is now less convincing partly due to the uncertain outlook for inflation,” Mr Robertson said.

The six-month delay comes as inflation rises across housing, services, and groceries, just as Australians head into the busiest shopping period of the year.

And it’s a delay that could become permanent if RBA governor Michele Bullock’s comments earlier this week were anything to go by.

Ms Bullock didn’t just reveal no cut in November, she flagged the possibility the cut cycle was already over.

“It’s possible that there are no more rate cuts. It’s possible there’s some more. But as I said earlier, we didn’t go as high, so we might not have to come down as far,” she said.

“The board are concerned about employment as well, because that’s part of their mandate. But we’re … a little more concerned about making sure that we do get inflation sustainably back in the band.”

Inflation is wreaking havoc on rate cuts. Source: Canstar.

It is the labour market trends remain the wildcard. “The most compelling argument for at least one more RBA rate cut in 2026 is recent weaker jobs data, with the unemployment rate rising to 4.5 per cent in September – its highest level since 2021 – and the risk of this trend continuing over the next 12–18 months,” Mr Robertson said.

“Interestingly the updated RBA forecasts released (Wednesday) still only predict unemployment peaking at 4.4 per cent, so the next few months’ jobs numbers will be important to see if the RBA are right in their assumption that labour markets will remain relatively tight.”

Canstar.com.au data insights director Sally Tindall agreed “three months of higher-than-expected monthly inflation results rules out further cash rate cuts in 2025”.

A Canstar statement said “a sharp rise in quarterly inflation has squashed any chance of a further rate cut in 2025 and casts doubt over further cash rate cuts in the cycle”.

September quarter CPI results saw annual headline inflation print at 3.2 per cent, up from 2.1pc in the previous quarter, while trimmed mean inflation jumped from an annual rate of 2.7pc to 3pc.

Australia’s situation contrasts with other major economies, Mr Robertson said. “Unlike the US Federal Reserve, the Bank of Canada and the Reserve Bank of New Zealand, who all cut their rates in October, the RBA will now need to see more data before being in position to follow suit.”

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