The Reserve Bank of Australia (RBA) has opted to hold the cash rate steady at 3.60% this Melbourne Cup Day, reflecting a cautious approach in response to stubbornly high inflation.
Read today’s official statement on the RBA’s website.
Australia’s hotter-than-expected inflation figures had many mortgage holders on edge over what the RBA’s next move might be, but the RBA has decided to hold firm for the moment.
According to the Australian Bureau of Statistics, the Consumer Price Index (CPI) rose 3.2% over the year to September. The biggest price pressures came from housing (up 2.5%), recreation and culture (1.9%), and transport (1.2%).
The RBA’s preferred measure of underlying inflation – known as the trimmed mean – also climbed to 3% in the September quarter, brushing up against the top of its target range.
At the same time, the unemployment rate rose to 4.5% in September, up from 4.3% in August, marking the highest level recorded since late 2021. These mixed signals – persistent inflation but a softening labour market – have prompted the RBA to adopt a wait-and-see approach, giving it more time to assess how rate cuts from earlier this year are flowing through the economy.
While the cash rate remains on hold for now, experts are divided on what the RBA’s next move will be. Some expect further tightening if inflation remains sticky, while others believe the next change to the cash rate may not come until 2026.
If you’re wondering whether your lender has made any rate changes recently, or what this means for your repayments, now’s a great time to check in. We can review your loan and ensure your mortgage remains competitive in the current market.
The next RBA cash rate decision will be announced on 9 December.
Need help understanding what this announcement means for you? Contact us today.
