The RBA is expected to hold the cash rate at 3.60 per cent its meeting next week. (Source: AAP)
The Reserve Bank of Australia (RBA) is expected to hold the cash rate at its meeting next week. The central bank has cut interest rates three times this year, providing hundreds of dollars in relief to mortgage holders.
However, Finder’s latest RBA Cash Rate Survey found experts were united for the first time this year in expecting rates to remain at 3.60 per cent this month. More rate cuts are expected, though, with 69 per cent predicting another cut in November.
University of Melbourne senior lecturer in economics Tomasz Wozniak said rates were on their way down, but Aussies shouldn’t expect relief at every meeting.
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“No doubt the RBA is on a slide down with the cash rate. However, the several promised cuts will be spread over quite some time, and we should not expect a cut at every single meeting,” Wozniak said.
AMP chief economist Shane Oliver agreed the RBA has signalled a gradual, measured approach to easing interest rates.
“Since the August meeting nothing has happened to change this. Underlying inflation is around target and economic growth is recovering gradually. So the RBA is likely to hold,” Oliver said.
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Economist Saul Eslake echoed this and said the data since the last meeting hadn’t “warranted diverting” from the RBA’s gradual rate-cutting stance.
Finder head of consumer research Graham Cooke said “mixed economic signals” had kept the RBA in a holding pattern.
“While spending remains strong, rising inflation and increasing unemployment add complexity to the decision-making process,” he said.
“Despite full consensus of a pause, the majority of economists predict a further rate cut by November 2025, as inflationary pressures ease and the economy continues its slow recovery.
“However, September’s increase in monthly inflation from 2.8% to 3% may keep the RBA’s scissors in the sheath on Cup Day if the quarterly data follows suit.”
Headline inflation rose to an annual rate of 3 per cent in August, the monthly Consumer Price Index revealed. This was up from 2.8 per cent in the previous month and the highest level since July 2024.
Annual trimmed mean inflation was 2.6 per cent to August, down from 2.7 per cent in July.
The unemployment rate was steady at 4.2 per cent in August, with weaker-than-expected figures showing employment fell by 5,400 in August, following a solid 26,500 gain in July.
Nearly 7 in 10 experts surveyed predict the RBA will cut rates again in November, while 28 per cent believe a cut will come in February.
Recent inflation figures have thrown a spanner in forecasts, with NAB ruling out rate cuts for the rest of the year and now tipping just one more cut in May 2026.
Commonwealth Bank, Westpac and ANZ expect the RBA will cut in November, but Commonwealth Bank noted it was not a “done deal”.
Westpac expects cuts in November, February and May, but also acknowledged the timing of future rate cuts “remains uncertain and it is possible the RBA ends up cutting by less”.
For a borrower with a $600,000 mortgage, a cut in November would drop their minimum repayments by $87, Canstar found.
When added to the cuts in February, May and August, the total repayment drop would be $359.
The RBA will announce its decision at 2:30pm on Tuesday, September 30.
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