Rates cut again as RBA goes all out to coax economic growth<\/a><\/p>\n
Thank you for joining us<\/p>\n
4.29pm<\/p>\n
Thank you for following our live blog this afternoon on the RBA’s decision to cut the cash rate a further 0.25%.<\/p>\n
Keep updated over the next few days on\u00a0realestate.com.au<\/a>\u00a0with all the latest commentary on the decision, updates from economists, and outlooks on the bank’s next moves.<\/p>\n The next cash rate decision will be on 29 September.<\/p>\n Board has no regrets about July hold<\/p>\n 4.13pm<\/p>\n Governor Bullock has been quick to defend the board\u2019s decision to hold the cash rate last month, despite criticism.<\/p>\n \u201cI think the right decision was to confirm that we were on track. I said at the time in July that there were a few monthly numbers that were volatile. They did give us pause to think whether or not there were some risks we had underestimated with inflation,\u201d she said.<\/p>\n \u201cWe were comfortable when we saw the quarterly numbers. Five weeks was a relevant time to wait and confirm.\u201d<\/p>\n Governor vague on back-to-back cut chances<\/p>\n 4:08pm<\/p>\n While the RBA has passed down three cuts to the cash rate this year, each of them has been staggered by \u2018hold\u2019 decisions to the frustration of borrowers.<\/p>\n Speaking at the press conference, governor Bullock has avoided stirring up further talk of consecutive cuts this year.<\/p>\n \u201cI wouldn\u2019t say one way or the other that we won\u2019t be having back-to-back cuts,\u201d she said.<\/p>\n \u201cEach meeting, we\u2019ll be looking at what we\u2019ve learnt since the previous meeting and judging whether or not we think we are broadly still on track.\u201d<\/p>\n Housing market activity to pick up<\/p>\n 3:59pm<\/p>\n The RBA board is expecting a natural uptick in property prices on the back of today\u2019s cut.<\/p>\n Speaking at the press conference, governor Bullock reiterated housing is one of the channels through which monetary policy works.<\/p>\n \u201cWe have seen a fairly gradual recovery in housing activity broadly,\u201d she said.<\/p>\n \u201cWe hope it happens in a nice measured way, but ultimately, we can\u2019t control what happens there.<\/p>\n \u201cProperty prices are about supply and demand ultimately and we don\u2019t control that.\u201d<\/p>\n \u2018Rates may need to be lower\u2019, RBA says<\/p>\n 3.52pm<\/p>\n Governor Bullock says the board will continue to consider labour force surveys, Consumer Price Index indicators, and national accounts data to confirm more cuts can be made to the cash rate in 2025.<\/p>\n \u201cIf it doesn\u2019t confirm either direction we\u2019re heading, we\u2019ll have to think about what to do with interest rates,\u201d she said.<\/p>\n \u201cDo we continue to follow the path we think are underlying out forecasts, or will they need tweaking in either director?<\/p>\n \u201cThere\u2019s going to be quite a bit of data coming out over the next few months.\u201d<\/p>\n Bullock: Productivity a matter for the government<\/p>\n 3:46pm<\/p>\n Governor Bullock has pushed back on questions from the press around productivity levels and the RBA\u2019s potential influence.<\/p>\n \u201cProductivity slowdown is a matter for the government that they are taking on.<\/p>\n They are looking at what they can do to take themselves out of the productivity slump,” she said. “The government recognises this is a big issue and they are tackling it.<\/p>\n \u201cThere is nothing the Reserve Bank can do. All we can do is make sure we have low and stable inflation.\u201d<\/p>\n Bullock speaks on board’s economic forecast<\/p>\n 3:36pm<\/p>\n Governor Michele Bullock has opened the forecast with an overview of the board\u2019s thinking around the economic forecast.<\/p>\n \u201cFor the domestic economy, we see a slow recovery in GDP,\u201d she said.<\/p>\n \u201cWe expect a modest recovery in private demand and also expect labour market conditions to remain around their current levels and underlying inflation to remain sustainably at the mid-point range.<\/p>\n \u201cForecasts imply that the cash rate might need to be a bit lower than it is today to keep inflation low and stable and employment growing.\u201d<\/p>\n CBA and Westpac to pass on the rate cut<\/p>\n 3:31pm<\/p>\n Commonwealth Bank and Westpac have confirmed they will pass on today’s rate in full on eligible variable-rate products.<\/p>\n Commonwealth Bank said the rate reduction will apply to the bank’s Business Bank\u2019s Variable Base Rate, Residential Equity Rate, and Overdraft Reference Rate, as well as eligible variable-rate business lending products including BetterBusiness Loans and Business Overdrafts.<\/p>\n Bullock prepares to address media<\/p>\n 3:29pm<\/p>\n Governor Michele Bullock will appear at a post-rate decision press conference in a few minutes to discuss the RBA\u2019s latest decision.<\/p>\n She is expected to speak through the board\u2019s decision making, comment on the bank\u2019s current economic outlook, and take questions from journalists.<\/p>\n RBA board unanimous but cautious on rate cut decision<\/p>\n 3:12pm<\/p>\n In a statement accompanying this afternoon’s rate cut decision, the RBA board said it remains cautious about the economic outlook for Australia.<\/p>\n “Wages growth has eased from its peak but productivity growth has not picked up and growth in unit labour costs remains high,” it read.<\/p>\n Michele Bullock has addressed the media following today’s interest rate cut announcement. Picture: NewsWire \/ Nikki Short<\/p>\n Interest rates now at a 28-month low<\/p>\n 3:03pm<\/p>\n The new cash rate is the lowest Australians have experienced in well over two years. The cash rate was upped to 3.60% April 2023 and continued to track upwards until this year.<\/p>\n Today\u2019s cut is the third from the RBA in six months, with a further two priced in before the end of the year.<\/a><\/p>\n Save big on mortgages<\/p>\n 2:43pm<\/p>\n A lower cash rate will be welcome news for mortgage holders who could be in for some sizeable savings if their lenders pass on the cut directly.<\/p>\n With a 0.25% cut to mortgage rates, repayments for homeowners on a $500,000 loan are set to drop around $80.<\/p>\n See how much you could save with Mortgage Choice’s mortgage repayment calculator<\/a><\/p>\n Cash rate cut to 3.60%<\/p>\n 2.30pm<\/p>\n The RBA board has confirmed the cash rate has been cut a further 0.25% to 3.60%.<\/p>\n The cut is largely in line with market and economist expectations and follows cuts in May and February.<\/p>\n Banks cutting rates early<\/p>\n 2:17pm<\/p>\n Despite last month\u2019s shock cash rate hold, a surprising number of lenders have opted to move early on rates in the last week.<\/p>\n Another cut today is expected to continue to fuel the rate-cutting competition between lenders who are keen to lock in deals with refinancers, investors and first-home buyers.<\/p>\n No rate shock anticipated<\/p>\n 2:01pm<\/p>\n RBA deputy governor Andrew Hauser set expectations of a cut high last week after admitting July\u2019s unexpected rate hold was an unusual occurrence.<\/p>\n \u201cWe should be trying to set policy right and trying to set policy in a way that is predictable,\u201d he said in Sydney. \u201cOn the whole, those things should overlap.\u201d<\/p>\n Big four banks united<\/p>\n 1:44pm<\/p>\n Commonwealth Bank, Westpac, National Australia Bank and ANZ have all forecasted a 0.25% rate cut for this afternoon.<\/p>\n All four banks have priced in further interest rate cuts for the rest of the year, with Westpac\u2019s prediction of four more being the most confident.<\/p>\n Economist call: Cuts \u2018very likely\u2019<\/p>\n 1:32pm<\/p>\n REA Group executive manager of economics Angus Moore <\/a>says borrowers can likely expect a cut this afternoon thanks to the recent inflation data.<\/p>\n \u201cWhile it is a little higher than the bank had originally forecast, it should still be enough to give them the confidence inflation is continuing to head in the right direction and tip them over the line for a cut.\u201d<\/p>\n Homes more expensive than ever<\/p>\n 1:13pm<\/p>\n<\/p>\n