Welcome to our live coverage of today’s RBA interest rate decision.<\/p>\n
The RBA has held the cash rate at 4.35%. Stay tuned for reactions from economists and updates live from the press conference following the announcement.<\/p>\n
Jump to key updates<\/p>\n
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RBA Governor Michele Bullock. Picture: Gaye Gerard<\/p>\n
More rate hikes still on the table, RBA warns<\/p>\n
3:44pm<\/p>\n
Governor Michele Bullock says the Reserve Bank will still need more time to see whether its earlier rate hikes will be enough to ensure inflation will continue to cool in line with its latest forecasts.<\/p>\n
Speaking at this afternoon\u2019s media conference following the RBA board\u2019s decision to keep the cash rate at 4.35%, Ms Bullock confirmed the bank did also consider raising the cash rate for a fourth time.<\/p>\n
\u201cIncreases have been tough for households with mortgages, but they were necessary,\u201d she said. \u201cOur forecasts see inflation coming down to around the middle of the [2-3%] target band by 2027, but the forecasts are uncertain. In waiting, the board isn\u2019t ruling out that there might be a need for further rate rises.\u201d<\/p>\n
Ms Bullock added: \u201cThe board will raise interest rates further if that is what is required to bring inflation down in a timely way. Bringing inflation down is the board\u2019s key priority.\u201d<\/p>\n
RBA governor to face media over rate decision<\/p>\n
3:31pm<\/p>\n
Governor Michele Bullock is preparing to front the media, where she will answer questions from journalists on the decision of the RBA board to keep the cash rate on hold despite high underlying inflation.<\/p>\n
Ms Bullock will start her appearance by speaking through the discussions had among the board\u2019s nine members over the last two days. This is expected to touch on its consideration of the ongoing war in the Middle East and its longer-term effects, persistent high inflation, and household spending indicators.<\/p>\n
Media attention is expected to be on the bank\u2019s latest forecasts, including any revised outlook for the path of inflation, which came in notably cooler than the bank expected in June when a 5% peak had been expected.<\/p>\n
Reporters are also likely to question Ms Bullock on how imminent a move on interest rates will be, and whether it is likely to be another hike or a rate cut.<\/p>\n
Iran war inflation impact \u2018less than expected\u2019, RBA says<\/p>\n
3:15pm<\/p>\n
A statement released by the RBA this afternoon says the impact of the Middle East conflict on inflation has been \u201cfar less than expected\u201d. It\u2019s a major acknowledgement from the bank\u2019s monetary policy board and follows recent ABS findings that inflation in June was not the peak the bank had anticipated.<\/p>\n
The RBA says its three earlier rate hikes mean financial conditions have tightened since the start of the war six months ago, leaving space to keep the cash rate on hold.<\/p>\n
\u201cMoney market interest rates and government bond yields have risen, and the exchange rate has appreciated,\u201d it read. \u201cThere are signs that consumer spending growth is slowing gradually as expected, while growth in business debt and investment is strong.\u201d<\/p>\n
The statement also confirms the MPB appears to be getting back on track with its decision-making, with all nine members unanimous on the decision for the second time in a row, after struggling at the first three meetings of the year.<\/p>\n
RBA: AI investment is offsetting Middle East impacts<\/p>\n
2:58pm<\/p>\n
Slow economic growth in Australia continues to be a major focal point for the RBA, with its monetary policy board noting the \u201cprolonged uncertainty\u201d from the continuing Iran war and the ongoing uncertainty around interest rates.<\/p>\n
In a statement released alongside its decision to hold the cash rate steady this afternoon, the bank said growth in the nation\u2019s major trading partners had been stronger than expected in the months since the conflict began, specifically calling out AI-related investment in its statement.<\/p>\n
\u201cIt has outweighed the adverse effects of the Middle East conflict,\u201d the statement read. \u201cHistorically weak productivity growth continues to constrain potential growth.\u201d<\/p>\n
It comes after several weeks of messaging from RBA executives around its concerns for the negative effect rate that hikes have had in quashing economic growth prospects, warning wages will not improve until inflation is successfully brought back into a low range.<\/p>\n
Rate hold protects Aussies from grim record<\/p>\n
2:46pm<\/p>\n
Today\u2019s news of another cash rate hold will be welcome by Aussie households, many of whom are continuing to feel the cost-of-living pressures from the first half of the year.<\/p>\n
A second consecutive decision to keep the cash rate at 4.35% marks an important moment for the nation; the cash rate is just 0.15 percentage points away from a 15-year high, meaning a regular 0.25 percentage point hike today would have taken the cash rate above that.<\/p>\n
The cash rate sat at 4.75% between November 2010 and October 2011, before dropping slightly to 4.60%. Robust economic growth off the back of resource demand from Asia and Australia\u2019s mining where behind the tight conditions, along with some global instability from European banks.<\/p>\n
While homeowners can expect some stability over the next two months now, the bank still has four more meetings ahead this year in which the cash rate could be raised yet again.<\/p>\n
Read more: Lender wars: The secrets to locking down the best home loan<\/a><\/p>\n RBA holds the cash rate steady at 4:35%<\/p>\n 2:30pm<\/p>\n The Reserve Bank has left the cash rate on hold today in a move that will keep it at 4.35% until at least the end of next month.<\/p>\n It\u2019s more welcome relief for borrowers, though not unexpected thanks to cooler-than-forecast inflation, a softening labour market and employment figures holding steady across June.<\/p>\n While tensions in the Middle East continue to cause spikes in global oil prices, market volatility associated with the war has been largely mitigated by the Reserve Bank\u2019s three rate hikes in the first half of the year, giving households some breathing room as they adjust to the pressures of higher fuel prices as the government\u2019s fuel excise discount winds up after four months.<\/p>\n The RBA board\u2019s statement that accompanies today\u2019s decision will be published shortly. It will provide a look into members\u2019 deliberations this week, along with its latest forecasts for inflation, economic growth and broader market conditions as the second half of the year unfolds.<\/p>\n Read more: RBA keeps interest rates on hold at 4.35% ahead of spring selling season<\/a><\/p>\n Markets confident the RBA will hold rates<\/p>\n 2:14pm<\/p>\n Market expectations for a rate hold have been mixed over the last few weeks, though latest data from the Australian Stock Exchange shows pricing was trading at 95.65 as of Friday, meaning there is a 0% expectation for the cash rate to rise.<\/p>\n If the cash rate is left unchanged, it will mark the second consecutive hold decision from the RBA and represent a long-awaited turning point for households in a year that has been dominating by a tightening cycle.<\/p>\n One or more cash rate hikes later in the year are still expected by some industry experts, though cooler-than-forecast inflation and a slowing labour market are painting a more positive picture than what the bank was looking at when it held rates steady in June.<\/p>\n The RBA Rate Indicator calculates the probability of a rate change using market-determined pricing from the ASX 30-Day Interbank Cash Rate Futures.<\/p>\n Read more: RBA governor warns sluggish productivity is hindering rate cut chances<\/a><\/p>\n Room in the tank for more hikes, RBA says<\/p>\n 1:59pm<\/p>\n While hard-pressed households will be hoping the cost of living isn\u2019t further compounded by a rate rise this afternoon, the RBA has signaled there is space for more tightening.<\/p>\n Assistant governor Sarah Hunter\u2019s appearance at an economic forum in Sydney two weeks ago raised eyebrows after the chief economist said there are \u201cabsolutely no signs in the system of any systemic stress\u201d. This means things such as mortgage repayment capacity levels, bank lending and liquidity levels are not keeping the RBA awake at night.<\/p>\n Ms Hunter said it \u201cdoesn\u2019t look like households with a mortgage are systemically struggling to meet that bill at the moment\u201d, raising concerns the RBA feels another rate hike is manageable.<\/p>\n The average owner occupier mortgage in Australia is approximately $735,000, according to the ABS, with Mortgage Choice calculations showing each 0.25 percentage point rate hike this year has added around $115 a month to minimum repayments on that amount.<\/p>\n Read more: Room for a hike? RBA says households show \u2018no signs\u2019 of widespread stress<\/a><\/p>\n Economist prediction: No rate hike today<\/p>\n 1:45pm<\/p>\n The Reserve Bank is not likely to hike interest rates today and will instead wait and see how the economic picture develops as this high inflationary period continues, a leading economist believes.<\/p>\n Realestate.com.au\u2019s Angus Moore says a hold is \u201cnearly universally acknowledged\u201d today after the June inflation data from the ABS showed there had been no uptick in underlying inflation since its reading in May. Nevertheless, Mr Moore warned Aussies aren\u2019t out of the woods just yet.<\/p>\n \u201cWhat is going to be important to watch is not the decision, but the RBA’s forecasts,\u201d he explains. \u201cHow much signal the RBA is taking from the better-than-expected inflation outcome is really going to dictate whether and when we might expect to see another move.<\/p>\n \u201cIf the bank is viewing last fortnight’s inflation data as just a transitory surprise and still forecasting inflation to pick up that means we might see a hike sooner rather than later.\u201d<\/p>\n Read more: RBA tightrope puts Aussie households at centre of rate balancing act<\/a><\/p>\n Australia\u2019s four big banks agree on a rate hold for today<\/p>\n 1:29pm<\/p>\n Australia\u2019s largest home loan lenders \u2013 big banks CBA, Westpac, National Australia Bank and ANZ \u2013 agree that this week\u2019s Monetary Policy Board meeting will not end with a rate hike announcement.<\/p>\n While there are mixed views from the banks on what the rest of 2026 will bring, all four say the Reserve Bank will need more time to assess the impact of its February, April and May rate hikes, while also waiting to see whether peace negotiations in the Middle East can stabilise the Iran War\u2019s various geopolitical conflicts.<\/p>\n Westpac has been the outlier among the four this year, with consistently hawkish expectations for tightening. Despite this, the bank has revised its long-held view for a rate hike today, instead shifting in line with broader market forecasts for a hold.<\/p>\n Smaller lenders have also been sharpening variable rate offerings for new customers over the last few weeks, suggesting a wide consensus for a hold.<\/p>\n Read more: Major bank drops new expectation for 2027 rate cuts<\/a><\/p>\n Middle East challenges weigh on RBA oil price concerns<\/p>\n 1:15pm<\/p>\n While the labour market is easing quicker than expected and inflation is tracking below the RBA\u2019s expectations, uncertainty stemming from the Middle East conflict continues to weigh on the bank\u2019s short-term forecasting.<\/p>\n Consensus across markets and economists is for interest rates to remain on hold for the rest of the year, though Australia\u2019s largest lender Commonwealth Bank has warned of \u201clingering risks\u201d including a full-scale re-escalation of the Iran War.<\/p>\n The memorandum of understanding signed by American and Iranian officials in June outlined a 14-point agreement to end the almost six-month long conflict, but its truce agreement was violated in July after commercial ships in the Strait of Hormuz were targeted. A corresponding spike in oil prices leaves Australians in a continued period of vulnerability as tensions remain high globally.<\/p>\n \u201cWe expect the RBA to remain concerned about elevated inflation,\u201d head of Australian economics Belinda Allen said. \u201c[We] reiterate they will be willing to hike again if required.\u201d<\/p>\n Read more: Why the Reserve Bank\u2019s elusive inflation target means it must hold rates<\/a><\/p>\n Home prices continuing to drop<\/p>\n 1:02pm<\/p>\n While households will be hoping the Reserve Bank has finished hiking rates for now, continued fears around the resilience of the property market are clouding the outlook for this afternoon.<\/p>\n The realestate.com.au Home Price Index shows national home prices fell in April, May, June and July, wiping $14,000 in value off a median priced Aussie home since the start of the Iran War in late February.<\/p>\n Regional areas continue to outperform their capital city counterparts, with prices in regional Australia up 8% on July 2025, led by strong growth in Western Australia, Tasmania and South Australia.<\/p>\n Property values in Sydney and Melbourne are down compared to 12 months ago, while Australia\u2019s cheapest capitals Darwin and Hobart have seen 14.9% and 7.8% price growth, respectively. Despite weak performance overall, Sydney remains the most expensive city in which to buy a home, with a median price of $1,205,000 \u2013 close to double that of Darwin ($636,000).<\/p>\n Read more: PropTrack Home Price Index \u2013 July 2026<\/a><\/p>\n RBA concerned about public\u2019s lack of knowledge around inflation<\/p>\n 12:44pm<\/p>\n As the RBA prepares to hand down its decision on the cash rate this afternoon, discussions among its monetary policy board (MPB) members are likely to touch on its recent findings about households.<\/p>\n In a three-phase survey of 9000 Australians between February 2025 and March 2026, the RBA looked at how the public experience and understand the economy.<\/p>\n While the bank says having a grasp of its work is \u201ccrucial\u201d for its success, it found a \u201cfundamental\u201d lack of understanding about economics among three quarters of those surveyed when publishing its findings late last month. The bank particularly pointed out 75% of the public largely misunderstand how interest rates affect inflation, adding this could be denting its reputation.<\/p>\n It comes after RBA executives used media appearances in recent months to stress the importance of public confidence in its work, adding there is \u201cless risk of inflation getting out of control\u201d when public expectation is closely anchored to its 2-3% target.<\/p>\n Read more: RBA says its job is made harder by Aussies \u2018fundamental\u2019 lack of understanding on inflation<\/a><\/p>\n Housing market worse than the RBA expected<\/p>\n 12:32pm<\/p>\n This year\u2019s combination of high inflation, war-induced price pressures and uncertainty around property tax changes have left the housing market in an uncharacteristic slump over the last few months.<\/p>\n Home prices fell for the fourth straight month in July, with the nation\u2019s priciest capital cities leading the decline. The median price of a home in Australia now sits at $894,000, down from $908,000 in March.<\/p>\n In the leadup to today\u2019s rate decision, the RBA warned the housing market has been weaker than it anticipated since the start of the war, with governor Michele Bullock saying it is a standout poor performer in the economy.<\/p>\n What will factor into the bank\u2019s interest rate decision is how changes in housing prices affect household confidence, with spending and investment decisions often dropping off when home prices are down. This is then likely to slow further an already-sluggish domestic economy, opening the door for the RBA to consider holding off on hikes.<\/p>\n Read more: RBA says Iran impact on housing market worse than expected<\/a><\/p>\n RBA optimistic despite high inflation<\/p>\n 12:14pm<\/p>\n The RBA\u2019s three rate hikes earlier this year have gone a long way to softening its drastically high inflation expectations, opening the door to a sustained period without any change.<\/p>\n Data published by the Australian Bureau of Statistics shows the Consumer Price Index rose 3.8% in the 12 months to June, significantly under the grim 5% forecast the RBA and Treasury had anticipated earlier in the year.<\/p>\n June also spelled good news for underlying inflation; measured by the trimmed mean, it leaves out the most volatile price changes each month and is a more accurate reading the RBA relies on for decision making. While it is still far outside the RBAs 2-3% target, a reading of 3.6% in the 12 months to June means there was no change from May.<\/p>\n REA Group executive manager of economics Angus Moore labelled the inflation data \u201ca good surprise\u201d for households, adding it largely cuts any chance of a hike today.<\/p>\n