The RBA has left rates unchanged again. Here's why it paused, what economists expect next, and what it means for your money.
We're well past the halfway mark of 2026… and if you thought the rate rises were behind us, you're in good company.
Tensions in the Middle East flared up again just weeks after that peace deal was signed, sending oil prices climbing and reminding everyone how fragile the ceasefire really was.
And now when it comes to the cash rate? The Reserve Bank of Australia is sitting tight. It held the cash rate at 4.35% for a second meeting in a row.
It's exactly what all four big banks, CBA, NAB, ANZ and Westpac, were expecting. Westpac had only just dropped its call for two more hikes, after inflation data came in more “benign” than feared.
Quick reminder: Inflation measures the rise in prices of goods and services using the Consumer Price Index. When inflation is too high, the RBA can raise the cash rate as a tool to slow spending and borrowing.
Headline inflation eased to 3.8% in June, down from 4.0% in May, the calmest read since the Middle East conflict first rattled markets. Underlying inflation, the RBA's preferred measure, held steady at 3.6%, undercutting the RBA's own 3.8% forecast for the quarter.
The labour market's also cooling a touch. Unemployment sat at 4.4% in June, still near its highest level since the pandemic.
Maybe. A ceasefire had briefly calmed things down, but fighting flared up again in July, pushing oil back above $90 a barrel and putting shipping routes at risk again.
The RBA can't control what happens overseas. What it can control is the cash rate, and for now, it's chosen to leave that alone.
Pretty much everyone called this one. All four big banks are now tipping the RBA's hiking cycle is done, with Westpac backing off its call for two more hikes entirely. But not everyone's convinced. A survey of 40+ economists still has just over half expecting at least one more hike before the year's out, and Warren Hogan at EQ Economics is warning the cash rate still has further to go. Either way, most forecasters don't expect any cuts until sometime in 2027.
For most people, it's business as usual. If you've got a variable rate home loan, your repayments stay put.
Good news for savers too. Your interest earning accounts avoid another hit, so you'll keep earning at your current rate, though the fine print of your specific account still matters.
Just don't expect the squeeze to ease anytime soon. Most economists reckon relief is still more than a year away.
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