The Reserve Bank has left the official interest rate on hold, as it warned house prices and rents will rise in 2026 after a surprise rebound in inflation.<\/p>\n
The RBA\u2019s monetary policy board on Tuesday kept the cash rate at 3.6%, where it has sat since August. Economists and banks overwhelmingly expected no change.<\/p>\n
The central bank has cut interest rates three times in 2025, easing pressure on mortgage holders and fuelling rapid house price rises.<\/p>\n
Sign up: AU Breaking News email<\/a><\/p>\n Core inflation rose to 3% \u2013 the top of the RBA\u2019s preferred range \u2013 in September, the first acceleration of the underlying measure since 2022.<\/p>\n Inflation will surge much higher by mid-2026 \u2013 reaching a headline rate of 3.7%, and 3.2% by the bank\u2019s preferred core measure \u2013 according to updated RBA forecasts accounting for September\u2019s increase.<\/p>\n Rents, house prices and service fees are among the categories set to rise faster than previously forecast.<\/p>\n The RBA board dismissed a surprise jump in unemployment in September, saying the jobs market was still running hot as businesses struggled to find workers.<\/p>\n There was no need for a November rate cut as spending and jobs growth had held up and past rate cuts were still having a delayed effect, the rate-setting board said.<\/p>\n \u201cGiven [these delays], and the recent evidence of more persistent inflation, the Board judged that it was appropriate to remain cautious,\u201d the board\u2019s statement read.<\/p>\n Financial markets over the last week have cut back their bets on another interest rate cut being handed down in the next 12 months. Major banks do not expect another cut until next year.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n Privacy Notice: Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n The bank\u2019s updated forecasts, predicated on market bets of a cut by the end of 2026, show core and headline inflation were no longer expected to gradually return to 2.5%, the middle of the RBA\u2019s preferred range, but instead bump up then drop back to 2.6% by the end of 2027.<\/p>\n Higher inflation meant real wages would go backwards by the end of 2026 from the start of 2025, the bank said in its statement on monetary policy, released on Tuesday. Real wages had previously been forecast to pick up.<\/p>\n Some of the inflation increase would persist as past rate cuts and rising consumer spending meant Australia\u2019s economy was growing at close to its speed limit, stretching businesses and increasing pressure on prices, the statement read.<\/p>\n The RBA governor, Michele Bullock, was scheduled to address media on Tuesday afternoon to explain the board\u2019s thinking.<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank has left the official interest rate on hold, as it warned house prices and rents…\n","protected":false},"author":2,"featured_media":242610,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-242609","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/242609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=242609"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/242609\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/242610"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=242609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=242609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=242609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}