Most experts predict no change to interest rates in Tuesday's meeting amid ongoing inflation concerns
The Reserve Bank of Australia (RBA) is widely anticipated to keep the official cash rate on hold this month, as persistent inflation continues to shape monetary policy decisions.
A panel of 35 economists and experts participated in the latest Finder RBA Cash Rate Survey, with 86% forecasting that the central bank will maintain the cash rate at 3.60% at Tuesday’s meeting.
Only five out of the 35 respondents expect a rate cut following the release of recent consumer price index data. This marks a notable shift from September, when nearly 70% of respondents were predicting a rate reduction in November.
Graham Cooke (pictured right), head of consumer research at Finder, commented on the changing outlook for borrowers. “This time last month, there was plenty of optimism for a rate cut in November – that’s largely evaporated,” he said.
“The RBA wants to see inflation sit somewhere between 2 and 3%, and it just edged above the top threshold. The RBA will want to see that number trending down again before relieving any more cash rate pressure.”
Mark Crosby, an economist at Monash University, also stated that the current economic data does not support a rate cut. “The question is whether the latest inflation number is a blip or a trend,” he said.
Saul Eslake, principal at Corinna Economic Advisory, also pointed to the recent inflation figures as a decisive factor. “The ‘materially’ higher-than-expected September quarter CPI has dealt a fatal blow to hopes of a rate cut in November, and reduced (although in my honest opinion, not fatally) the chances of a rate cut in February next year,” Eslake said.
A small number of experts, including Jeffrey Sheen from Macquarie University, continue to anticipate a rate cut. “Though the RBA Board will be concerned about the mixed messages, I expect them to cut the cash rate in recognition that the downside macroeconomic risks dominate,” he said.
Micaela Fuchila of Jarden also expects a reduction. “At this point in the cycle, focus is expected to shift to the labour market,” she said. “Employment growth has slowed and the unemployment rate is on the rise while inflation pressures remain contained.”
Looking ahead, two-thirds of the panel expect at least one further rate cut from the RBA within the next year, although there is little consensus on timing. The largest group (34%) anticipates a cut in February 2026.
Finder’s Consumer Sentiment Tracker indicates that 36% of homeowners experienced difficulty meeting mortgage repayments in October. Among experts who addressed the issue, 68% believe mortgage delinquencies and arrears will remain steady, while 20% expect a decline.
Cooke noted that borrowers can still take steps to reduce their costs, regardless of the RBA’s decision. “Even trimming half a percentage point off your home loan could save you thousands of dollars a year,” he said.
“A number of lenders are also offering cashback – up to $4,000 – for refinancing, which could be worthwhile for some borrowers looking for a cash injection.”
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