{"id":565381,"date":"2026-08-11T05:32:23","date_gmt":"2026-08-11T05:32:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/565381\/"},"modified":"2026-08-11T05:32:23","modified_gmt":"2026-08-11T05:32:23","slug":"rba-live-updates-interest-rates-on-hold-as-reserve-bank-forecasts-paint-more-upbeat-picture","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/565381\/","title":{"rendered":"RBA live updates: Interest rates on hold as Reserve Bank forecasts paint more upbeat picture"},"content":{"rendered":"

Tue 11 Aug 2026 at 3:25pmTue 11 Aug 2026 at 3:25pm<\/p>\n

RBA hold provides stability, but economic outlook for small businesses still ‘tricky’\"Adelaide<\/p>\n

The RBA’s decision to hold the official cash rate at 4.35% has been welcomed by small businesses, but economists say there is still a long road ahead.<\/p>\n

Economist for small business accounting platform Xero Louise Southall says small business owners were already feeling the pinch on their bottom line from previous rate hikes this year.<\/p>\n

“Holding the interest rate won\u2019t stop expectations of further economic slowing, but it may provide some stability to consumer spending and business confidence, as households and businesses aren’t facing another immediate increase in borrowing costs,” she says.<\/p>\n

Right now, Ms Southall says it’s a “tricky period” for small business, with higher operation and fuel costs.<\/p>\n

Xero’s Small Business Insights data shows sales growth dipped to 6.5% year-on-year in the June quarter, down from 7.9% in the March quarter. Sales also grew less in May (4.0%) and June (4.8%).<\/p>\n

“This slowdown shows that recent cash rate increases are contributing to softer consumer demand, but inflation remains stubbornly elevated,” says Ms Southall.<\/p>\n

“Until inflation meaningfully responds to the rate hikes, and fuel prices ease, owners need to continue to closely manage and anticipate any cash flow pinch points in the months ahead.”<\/p>\n

Tue 11 Aug 2026 at 3:23pmTue 11 Aug 2026 at 3:23pm<\/p>\n

How have interest rates been tracking?\"Stephanie<\/p>\n

This is the second consecutive meeting of the RBA keeping the cash rate unchanged, after three hikes earlier in 2026.<\/p>\n

Here is a graph showing how it has tracked to get here:<\/p>\n

Despite this month’s decision, economists warn that underlying inflation is still too high, with some saying that they expect interest rates to have to rise again, at some point, to squeeze inflation out of the economy.<\/p>\n

Following today’s decision, the cash rate target will remain at 4.35% for the next seven weeks, until the RBA board’s next meeting in late September.<\/p>\n

Business reporter Gareth Hutchens\u00a0has more:<\/p>\n

Tue 11 Aug 2026 at 3:15pmTue 11 Aug 2026 at 3:15pm<\/p>\n

RBA governor Michele Bullock to speak at 3:30pm\"Stephanie<\/p>\n

Your business correspondent David Taylor is first on the scene \u2026 of a press conference not due to start for another 15 minutes or so.<\/p>\n

\"\"Plenty of seats at the RBA presser (ABC News: David Taylor)<\/p>\n

The RBA governor is due to front media in her regular-post meeting appearance very shortly, so stick around for live coverage here on the blog and on ABC News Channel.<\/p>\n

And given he has the pick of the bunch, to find out \u2014 which seat will DT choose?<\/p>\n

Tue 11 Aug 2026 at 3:05pmTue 11 Aug 2026 at 3:05pm<\/p>\n

Housing price falls to help inflation fight: economist\"Stephanie<\/p>\n

KPMG\u00a0Australia chief economist Brendan Rynne\u00a0joined finance presenter Alicia Barry\u00a0on ABC News Channel\u00a0as the interest rate decision came through.<\/p>\n

She asked him whether the recent downturn in housing prices will help reduce inflation pressure.<\/p>\n

“It certainly going to help, because there an idea of the wealth effect \u2014 as we feel like our house are starting to decline that we feel less wealthy and consume less,” he said.<\/p>\n

“There’s never been more Australians employed than we have at the moment.<\/p>\n

“It’s that momentum of people being employed and having large amount of money within their pocket to spend, notwithstanding the fact that were still having these cost of living challenges, but that momentum of spending in the household sector is continuing to drive relatively strong [economic growth].”<\/p>\n

Tue 11 Aug 2026 at 2:59pmTue 11 Aug 2026 at 2:59pm<\/p>\n

Mortgage repayments, debt burden on households near peak\"Michael<\/p>\n

You may feel like you’re being gouged by your bank but, if you’ve shopped around and are on a reasonable competitive rate, then chances are you’re getting a pretty good deal.<\/p>\n

“Spreads between lending rates and the cash rate also remain low by historical standards, reflecting low risk premia, favourable funding conditions and strong competition in lending markets,” the RBA observed.<\/p>\n

In plain English, this means the banks are not charging as much interest on mortgages above their cost of funding as they used to \u2014 bad for bank profits, good for borrowers.<\/p>\n

Despite this relatively smaller cut going to the banks, the RBA noted that scheduled mortgage repayments relative to household disposable income have increased to be close to their 2024 peak.<\/p>\n

Including consumer credit repayments, Australian households are spending around 12 per cent of their disposable income servicing debt. That overall number includes the millions of households that have little or no debt.<\/p>\n

As in 2024, this is now approaching the overall debt payment burden households faced just before the global financial crisis in 2008, when the RBA’s cash rate was 7.25 per cent, but mortgage debts were generally much smaller.<\/p>\n

However, the RBA noted that the previous period of low interest rates had seen most mortgage borrowers stash extra cash into their offset accounts or get ahead on their loan and build large redraw buffers, with the typical borrower now having the buffer of around a year’s worth of scheduled repayments in these savings.<\/p>\n

Tue 11 Aug 2026 at 2:47pmTue 11 Aug 2026 at 2:47pm<\/p>\n

AI boost outweighs Middle East hit to trading partners: RBA\"Stephanie<\/p>\n

Returning to the RBA board’s statement, released after its decision to keep the cash rate on hold, there’s a reference to artificial intelligence\u00a0and the economic impact.<\/p>\n

After detailing the “heightened uncertainties” due to the Middle East conflict, and the likely continued upward pressure on global energy prices and inflation, the RBA board noted that there has been a tempering factor:<\/p>\n

“So far, growth in Australia’s major trading partners has been stronger than expected, as the boost from AI-related investment has outweighed the adverse effects of the Middle East conflict,” the statement read.<\/p>\n

“In Australia, historically weak productivity growth continues to constrain potential growth.”<\/p>\n

Tue 11 Aug 2026 at 2:10pmTue 11 Aug 2026 at 2:10pm<\/p>\n

How are you feeling about interest rates?\"Stephanie<\/p>\n

I\u2019m really worried. We\u2019re still waiting to settle on a new build on a contract we signed in December. Now we are scared that we will be over mortgaged and with no way out if house prices slump to what is predicted. <\/p>\n

– KJ<\/p>\n

I\u2019m in catch22 with rates. As a retiree with no mortgage , my savings benefit . The higher the better. However I\u2019m also acutely aware of the effects on my kids and grandkids who do have mortgages. At the end of the day the realism is when I go they will benefit. They are somewhat immune in the long term. The RBA and the government need to keep in mind those without this long term immunity .<\/p>\n

– Phillip<\/p>\n

I’m an (early) retiree with savings and no mortgage, yet I am happy when interest rates go down. Why? Because I also own a decent amount of shares, and waning interest rates provides cheaper money for business to invest with. More investment means better returns on my shares. Lower interest rates also means less people saving, more people spending, which also provides companies with more money to (hopefully) give back as dividends.<\/p>\n

– Cam<\/p>\n

Thanks for joining us on the blog today and for your comments.<\/p>\n

Tue 11 Aug 2026 at 2:01pmTue 11 Aug 2026 at 2:01pm<\/p>\n

\ud83c\udfa5 Live coverage of interest rate decision on ABC News Channel\"Stephanie<\/p>\n

If you’re keen to watch along with our live coverage, with T-30 minutes until the RBA decision, you can watch\u00a0ABC News Channel\u00a0at the top of the blog or open this link in a new tab:<\/p>\n

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