The Reserve Bank of Australia (RBA) has left the cash rate steady at 3.6 per cent following its September board meeting, dashing hopes for a pre-Christmas rate cut. Governor Michele Bullock stated that while Australia faces a difficult property market, the bank's primary focus remains on inflation, not house prices.
Economists are divided on the timing of future cuts. NAB's Sally Auld expects the RBA to hold rates until May 2026, with only a final 25 basis point reduction. In contrast, ANZ economists still see a possible cut in November, though they acknowledge that the easing cycle may be nearing its end.
Deloitte Access Economics' Pradeep Philip argues that the economy is not overheating and that rate cuts should not be delayed. He forecasts a 0.25 percentage point cut in December, following the release of September GDP figures, with further cuts totaling 50 basis points in 2026, bringing the cash rate to 2.85 per cent.
Retailers have expressed disappointment, warning that the decision will suppress spending during the crucial Christmas season. The Australian Retailers Association and National Retail Association called for a cut to encourage discretionary spending. ARA CEO Chris Rodwell noted that many retailers rely on peak season for up to two-thirds of their profits and face ongoing cost pressures from rents, wages, energy, insurance, and retail crime.
