Relief for borrowers as RBA cuts official cash rate to 3.6%
Patrick Commins
The Reserve Bank has cut the cash rate by a quarter of a percentage point to 3.6%, from 3.85%.
Once lenders pass on the relief to their borrowers, the third rate cut of the year will deliver somebody with a $500,000 mortgage a further $74 off their monthly interest payments, according to Canstar, bringing the total drop to $272.
Reserve Bank of Australia governor Michele Bullock. Photograph: Steve Markham/AAP
The unanimous decision by the RBA’s monetary policy board was widely anticipated, and, while welcome, there will be some who believe rate relief was overdue.
Inflation is firmly back within the bank’s 2-3% target range, and the economy has suffered a weak start to the year amid ongoing cost of living pressures and the threats from Trump’s trade war.
Michele Bullock, the RBA governor, will hold a press conference at 3:30pm, where attention will turn to any hints on if – or when – there will be further cuts over coming months.
Updated at 00.54 EDT
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Bullock said the global outlook “remains unpredictable, even though it seems that the risk of a more damaging, widespread trade war has eased a bit”.
The RBA expects global growth to slow as we head into 2026, “as impacts from higher tariffs and broader policy uncertainty weigh on activity,” Bullock said. They expect the domestic economy see “a slow recovery in GDP” and labour market conditions to remain around the current levels.
There may be more interest rate cuts on the horizon, as Bullock said “the cash rate might need to be a bit lower than it is today to keep inflation low and stable, and employment growing, but there is still a lot of uncertainty”.
She continued:
Monetary policy remains well-positioned to respond to shocks that could come our way, and the board will keep doing what it needs to do to keep inflation down and maintain a healthy jobs market because, as we know, when inflation is low and stable and people can get jobs, it’s good for households, it’s good for the community, and it’s good for the broader Australian economy.
Updated at 01.39 EDT
Inflation tracking towards ‘target range’, RBA governor says
The Reserve Bank governor, Michele Bullock, has said inflation is on track to be in the RBA’s 2%-3% target range, which she says is on a “sustainable basis”.
Speaking to media after the RBA lowered interest rates today, Bullock said that because the price level has gone up so much during the period of high inflation from 2022 to 2024, “households are still feeling the pain of those higher costs”.
Bullock said:
The board’s strategy – as you know – has been to bring inflation down while avoiding a sharp rise in unemployment because we didn’t take rates as high as some other countries. It may be that we don’t need to reduce rates as much either, as demand and potential supply in the economy get closer to balance and inflationary pressures ease. The board’s discussing how we can sustain this.
Updated at 01.37 EDT
We’re expecting Reserve Bank governor Michele Bullock to speak to the media very shortly.
Albanese government does not have the support of RBA, says shadow treasurer
The shadow treasurer, Ted O’Brien, has claimed the interest rate cut demonstrates that the Reserve Bank does not support Labor’s management of the economy and is only “slight relief” for mortgage holders.
Speaking to media just now, O’Brien said:
This sends a very powerful message to the people of Australia that the Albanese government does not have the support of the RBA when it comes to managing the economy.
Australians are feeling poorer for a reason. They are becoming poorer and the news from the RBA today says they are only going to be feeling poorer still. Living standards will continue to be a problem in Australia as the cost of everything goes up.
There was some slight relief for mortgage holders who, under the new cash rate, will be paying around about $1,800 more every single month in interest payments, compared to when the Albanese government first came to office. This is some slight relief, but still, they are copping it.
Everyday Australians are becoming poorer and poorer under this government, and the RBA’s news today gives them no relief. If anything, it’s a firm vote of no confidence.
Updated at 01.28 EDT
Coalition would revoke recognition of a Palestinian state, says Ley
Josh Butler
Opposition leader Sussan Ley says the Coalition would revoke recognition of a Palestinian state, raising questions about how such a diplomatic about-face could be executed three or six years into the future of a newly established Palestine.
The Coalition has opposed yesterday’s decision from the Labor government, claiming Palestinian recognition was a reward for Hamas, so their final position today is not surprising. Ley said earlier that the Coalition’s shadow cabinet today resolved to oppose a Palestinian state and also “resolved that recognition would be revoked by a Coalition government.”
The Coalition, with just 43 lower house members to Labor’s 94, will remain in opposition until at least 2028, and potentially longer with such a mountain to climb to get back into office. Ley’s statement did not go into how Australia would diplomatically untangle recognition of a Palestinian state, three or six years down the track, or how revoking recognition of a Palestinian state would help contribute to the peace process between Israel and Palestine, or assist broader cohesion in the Middle East.
Ley said in a statement:
The Coalition wants Israeli hostages to be released, Gazans to be fed and for the war to end. The Albanese government’s decision to recognise a Palestinian state outside of a proper peace and two-state process will not deliver that outcome.
The decision does not make the world a safer place, expedite the end of the conflict, deliver a two-state solution, see the free flow of aid, support the release of hostages nor put an end to the terrorist group Hamas.
Leader of the opposition, Sussan Ley: ‘The decision does not make the world a safer place …’ Photograph: Mick Tsikas/AAP
Ley said the Coalition “would have never made this call and we do not agree with it”:
A Coalition government would only recognise a Palestinian State at the conclusion of a proper peace process.
Ley claimed that goals such as a demilitarised Palestine and the further isolation of Hamas “are pushed further away by recognising a Palestinian state outside of a proper peace and two-state process”.
Anthony Albanese has broken with longstanding bipartisan foreign policy and has failed to adequately explain how it will deliver peace and support Australia’s national interests, especially when our most important security ally in the United States is opposed
The prime minister has also failed to explain what happens to Australia’s recognition if Hamas stays in power or another terrorist group takes their place after the UN General Assembly meeting in September.
Updated at 01.16 EDT
Nick Visser
That’s all from me. Stephanie Convery will be your guide through all the news the afternoon has in store. Take care.
ShareChalmers hails ‘welcome relief’ after rate cut
Treasurer Jim Chalmers is speaking after the rate cut. He said:
This is very welcome relief for millions of Australians. It will put more money in the pockets of people who are under pressure.
This welcome decision wouldn’t be possible without the progress that Australians have made together on inflation. Getting inflation down from those very high peaks in the year that we came to office, down to well within the Reserve Bank’s target range, has given the independent Reserve Bank the confidence to cut interest rates three times this year.
Today’s very welcome decision on interest rates gives us confidence that we are on the right track, but as always, there’s more to do.
Jim Chalmers. Photograph: Lukas Coch/AAPShare
Updated at 00.57 EDT
Let the cuts begin: Macquarie Bank will drop rates on variable home loans in three days
Macquarie Bank is in with news on its rates within minutes, saying it will drop its variable home loans by .25% in line with the RBA decision. Customers will see those cuts in three days, from the 15 of August.
Ben Perham, the head of personal banking at Macquarie, said the quick timeline came after a similar move during the last cut in May:
We proved that the savings could be passed on to homeowners in just three days, instead of the industry average of 12 days. We were the fastest of the major banks and homeowners loved it, so we’re doing it again.
Updated at 00.41 EDT
Relief for borrowers as RBA cuts official cash rate to 3.6%Patrick Commins
The Reserve Bank has cut the cash rate by a quarter of a percentage point to 3.6%, from 3.85%.
Once lenders pass on the relief to their borrowers, the third rate cut of the year will deliver somebody with a $500,000 mortgage a further $74 off their monthly interest payments, according to Canstar, bringing the total drop to $272.
Reserve Bank of Australia governor Michele Bullock. Photograph: Steve Markham/AAP
The unanimous decision by the RBA’s monetary policy board was widely anticipated, and, while welcome, there will be some who believe rate relief was overdue.
Inflation is firmly back within the bank’s 2-3% target range, and the economy has suffered a weak start to the year amid ongoing cost of living pressures and the threats from Trump’s trade war.
Michele Bullock, the RBA governor, will hold a press conference at 3:30pm, where attention will turn to any hints on if – or when – there will be further cuts over coming months.
Updated at 00.54 EDT
RBA cuts cash rate to 3.6%
The Reserve Bank has delivered a widely tipped cut to the cash rate by a quarter of a percentage point, bringing it down from 3.85% to 3.6%.
Updated at 00.39 EDT
Taylor Swift announces new album
Taylor Swift’s 12.12 surprise is here: It’s a new album.
It’s called The Life of a Showgirl.
Taylor Swift. Photograph: Don Arnold/TAS Rights ManagementShare
Updated at 00.19 EDT