RBA interest rates live updates: The economic headwinds holding back timing of more rate relief

RBA governor Michele Bullock is speaking to the media after today’s decision to hold rates steady.

She said the bank is yet to see high price levels reached during the peak of inflation come down, even though increases have eased.

“We know that high inflation has pushed up prices across the board over the past few years, and while inflation has fallen a lot, the price level isn’t coming back down,” she said.

“This higher price level affects everyone, and it’s been especially tough on people of lower incomes and the more vulnerable.

“This is why it’s so important to keep inflation low and stable, and unemployment as low as possible.”

Ms Bullock said inflation was inside the bank’s preferred 2 to 3 per cent range.

She said while monthly inflation data was volatile, two components especially spooked the board.

“Market services and housing inflation were a little higher than we were expecting, so were just being a little bit cautious about that.

“It doesn’t suggest inflation is running away but we just need tobe a little bit cautious.”

Deloitte Access Economics is much more dovish than the prevailing market view of a terminal RBA cash rate of 3.35 per cent.

“A further 50 basis points of rate cuts are expected in 2026, lowering the cash rate to 2.85 per cent,” said Pradeep Philip, head of DAE.

He said the central bank’s steady-as-she-goes approach and should not be taken as a sign that the rate-cutting cycle is over.

“Geopolitics is driving uncertainty and remains little understood; the future drivers of growth, business investment and innovation, continue to languish,” Mr Philip said.

“This is the conundrum the RBA is grappling with – holding back rate cuts for too long means growth suffers; cutting too fast brings inflation risks.

“To be clear, the economy is not overheating as some suggest to then argue that the RBA should delay or abandon rate cuts.

“In fact, the opposite is true. The reality is that with global growth a worry, Australia needs to get its fundamentals for growth right – more business investment, better risk appetite, more innovation.”

We’ll hear more from RBA governor Michele Buillock when she fronts the media at 3.30pm AEST.

That may include clues on where the board thinks consumer prices could be headed after last week’s increase in monthly inflation to a 12-month high of 3 per cent.

Consumer credit agency Equifax says while there was no mortgage relief today, it expects the overall demand for home loans will continue to grow as the impact of the existing cuts continue to filter through to the market.

Its data shows that mortgage demand is picking up steam, showing growth of 10 per cent in August versus the same month in 2024, and outpacing the 5.2 per cent calendar year-to-date growth.

“In particular we have seen ongoing strength in refinancing, with refinance enquiriesconstituting 35.98 per cent of total mortgage demand in August 2025, which is an increase of 34.9 per cent from 2024,” it said.

“This suggests that homeowners who may have been holding off until multiple cuts had been announced to make the most of their refinancing opportunities have begun to move.”

Home borrowers are being urged to consider fixing their mortgage rates because of the increasing odds there will be only one more interest rate cut this cycle.

The Reserve Bank of Australia today left interest rates on hold at 3.6 per cent, confirming traders’ expectations the chances of a cut was just 4 per cent, arguing inflation was worse than anticipated only a month ago.

Canstar data insights director Sally Tindall said fixing a mortgage would make more sense financially if the RBA held off on cutting rates again until May next year, as NAB predicts.

“When NAB’s cash rate forecast is applied then this particular fixed rate option comes out on top,” she said.

“The difference between fixing and staying variable over the next two years could be thousands of dollars either way, depending on which forecast plays out. There’s no crystal ball here – just educated guesswork.”

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“On the domestic side, stronger-than-expected data on growth and inflation may indicate that households have become more comfortable consuming as real incomes and wealth rise,” it said.

“If this continues, it may make it easier for businesses to pass on cost increases and lead to more demand for labour.

“Alternatively, the recent growth in consumption might not persist, particularly if households become more concerned about overseas developments.”

The central bank’s statement said uncertainty in the global economy remains elevated.

“There is a little more clarity on the scope and scale of US tariffs and policy responses in other countries, suggesting that more extreme outcomes are likely to be avoided.,” it said.

“Trade policy developments are nevertheless still expected to have an adverse effect on global economic growth over time.

“Beyond tariffs, a broader range of geopolitical risks remain a threat to the global economy. This could all weigh on growth in aggregate demand and lead to weaker labour market conditions in the domestic economy.”

The central bank is clearly worried that last week’s higher read of monthly inflation could push out the September quarter numbers, showing consumer prices are still not quite as under control as it would like them to be.

“Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and potential supply closer towards balance,” it said just moments ago.

“Both headline and trimmed mean inflation were within the 2–3 per cent range in the June quarter.

“Recent data, while partial and volatile, suggest that inflation in the September quarter may be higher than expected at the time of the August Statement on Monetary Policy.”

As widely expected, homeowners have been left waiting for more repayment relief.

The RBA held the cash rate at 3.6 per cent. Its monetary policy board won’t meet again until Melbourne Cup Day on November 4.

That’s when most market watchers expect another 25 basis-point cut.

If you have an average mortgage of $600,000, three rounds of rate relief have so far this year have saved you $272 a month in repayments, according to the number-crunchers at Canstar.

Those who really pushed the boat out with a $1 million home loan are saving $453.

But is everyone feeling richer?

Data released by Commonwealth Bank yesterday shows just 11 per cent of its eligible customers chose to drop their repayments to the minimum following the August cut.

Canstar modelling highlights the flip side of keeping repayments the same.

Over the long term, thatfamily with a $600,000 loan that maintains this higher repayment could potentially save themselves $76,536 in interest charges and see them repay their mortgage three years and three months early.

If the RBA does cut the cash rate in November, that $600,000 mortgageholder would see their minimum monthly repayments drop by a further $87.