The Reserve Bank has cut the cash rate to 3.6%, the lowest level in 28 months. Follow for real-time updates, expert analysis, and industry reaction.
Board has no regrets about July hold
4.13pm
Governor Bullock has been quick to defend the board’s decision to hold the cash rate last month, despite criticism.
“I think the right decision was to confirm that we were on track. I said at the time in July that there were a few monthly numbers that were volatile. They did give us pause to think whether or not there were some risks we had underestimated with inflation,” she said.
“We were comfortable when we saw the quarterly numbers. Five weeks was a relevant time to wait and confirm.”
Governor vague on back-to-back cut chances
4:08pm
While the RBA has passed down three cuts to the cash rate this year, each of them has been staggered by ‘hold’ decisions to the frustration of borrowers.
Speaking at the press conference, governor Bullock has avoided stirring up further talk of consecutive cuts this year.
“I wouldn’t say one way or the other that we won’t be having back-to-back cuts,” she said.
“Each meeting, we’ll be looking at what we’ve learnt since the previous meeting and judging whether or not we think we are broadly still on track.”
Housing market activity to pick up
3:59pm
The RBA board is expecting a natural uptick in property prices on the back of today’s cut.
Speaking at the press conference, governor Bullock reiterated housing is one of the channels through which monetary policy works.
“We have seen a fairly gradual recovery in housing activity broadly,” she said.
“We hope it happens in a nice measured way, but ultimately, we can’t control what happens there.
“Property prices are about supply and demand ultimately and we don’t control that.”
‘Rates may need to be lower’, RBA says
3.52pm
Governor Bullock says the board will continue to consider labour force surveys, Consumer Price Index indicators, and national accounts data to confirm more cuts can be made to the cash rate in 2025.
“If it doesn’t confirm either direction we’re heading, we’ll have to think about what to do with interest rates,” she said.
“Do we continue to follow the path we think are underlying out forecasts, or will they need tweaking in either director?
“There’s going to be quite a bit of data coming out over the next few months.”
Bullock: Productivity a matter for the government
3:46pm
Governor Bullock has pushed back on questions from the press around productivity levels and the RBA’s potential influence.
“Productivity slowdown is a matter for the government that they are taking on.
They are looking at what they can do to take themselves out of the productivity slump,” she said. “The government recognises this is a big issue and they are tackling it.
“There is nothing the Reserve Bank can do. All we can do is make sure we have low and stable inflation.”
Bullock speaks on board’s economic forecast
3:36pm
Governor Michele Bullock has opened the forecast with an overview of the board’s thinking around the economic forecast.
“For the domestic economy, we see a slow recovery in GDP,” she said.
“We expect a modest recovery in private demand and also expect labour market conditions to remain around their current levels and underlying inflation to remain sustainably at the mid-point range.
“Forecasts imply that the cash rate might need to be a bit lower than it is today to keep inflation low and stable and employment growing.”
CBA and Westpac to pass on the rate cut
3:31pm
Commonwealth Bank and Westpac have confirmed they will pass on today’s rate in full on eligible variable-rate products.
Commonwealth Bank said the rate reduction will apply to the bank’s Business Bank’s Variable Base Rate, Residential Equity Rate, and Overdraft Reference Rate, as well as eligible variable-rate business lending products including BetterBusiness Loans and Business Overdrafts.
Bullock prepares to address media
3:29pm
Governor Michele Bullock will appear at a post-rate decision press conference in a few minutes to discuss the RBA’s latest decision.
She is expected to speak through the board’s decision making, comment on the bank’s current economic outlook, and take questions from journalists.
RBA board unanimous but cautious on rate cut decision
3:12pm
In a statement accompanying this afternoon’s rate cut decision, the RBA board said it remains cautious about the economic outlook for Australia.
“Wages growth has eased from its peak but productivity growth has not picked up and growth in unit labour costs remains high,” it read.
Read more: Relief for homeowners as RBA delivers highly-anticipated rate cut
Rates cut again as RBA goes all out to coax economic growth
Interest rates now at a 28-month low
3:03pm
The new cash rate is the lowest Australians have experienced in well over two years. The cash rate was upped to 3.60% April 2023 and continued to track upwards until this year.
Today’s cut is the third from the RBA in six months, with a further two priced in before the end of the year.
Save big on mortgages
2:43pm
A lower cash rate will be welcome news for mortgage holders who could be in for some sizeable savings if their lenders pass on the cut directly.
With a 0.25% cut to mortgage rates, repayments for homeowners on a $500,000 loan are set to drop around $80.
See how much you could save with Mortgage Choice’s mortgage repayment calculator
Cash rate cut to 3.60%
2.30pm
The RBA board has confirmed the cash rate has been cut a further 0.25% to 3.60%.
The cut is largely in line with market and economist expectations and follows cuts in May and February.
Michele Bullock is preparing to address the media following today’s interest rate cut announcement. Picture: NewsWire / Nikki Short
Banks cutting rates early
2:17pm
Despite last month’s shock cash rate hold, a surprising number of lenders have opted to move early on rates in the last week.
Another cut today is expected to continue to fuel the rate-cutting competition between lenders who are keen to lock in deals with refinancers, investors and first-home buyers.
No rate shock anticipated
2:01pm
RBA deputy governor Andrew Hauser set expectations of a cut high last week after admitting July’s unexpected rate hold was an unusual occurrence.
“We should be trying to set policy right and trying to set policy in a way that is predictable,” he said in Sydney. “On the whole, those things should overlap.”
Big four banks united
1:44pm
Commonwealth Bank, Westpac, National Australia Bank and ANZ have all forecasted a 0.25% rate cut for this afternoon.
All four banks have priced in further interest rate cuts for the rest of the year, with Westpac’s prediction of four more being the most confident.
Economist call: Cuts ‘very likely’
1:32pm
REA Group executive manager of economics Angus Moore says borrowers can likely expect a cut this afternoon thanks to the recent inflation data.
“While it is a little higher than the bank had originally forecast, it should still be enough to give them the confidence inflation is continuing to head in the right direction and tip them over the line for a cut.”
Homes more expensive than ever
1:13pm
National home prices hit a new record high of $827,000 in July and are likely to increase again off the back of another interest rate cut.
Capital city prices climbed 0.3% over July and are 4.3% higher compared to a year ago. Sydney, Brisbane and Perth are the most expensive capitals in which to buy a home.
Trump’s tariffs a big unknown
1:02pm
The effect of 10% baseline tariffs imposed by the United States on Australia at the start of August are yet to be fully felt.
The bank has warned repeatedly of the potential risk of trade war tensions with China in recent months but says there are no clear concerns impacting the domestic economy yet.
Inflation figures are promising
12:46pm
The much-anticipated June quarter inflation figures from the ABS have now confirmed trimmed mean inflation has continued to track downwards.
Annual inflation rose 2.7% over the year to the June quarter, with trimmed mean inflation now at its lowest level since December 2021.
July decision shock
12:28pm
Economists and markets were as shocked as homeowners last month when the RBA decided to hold the cash rate steady.
Governor Michele Bullock had said the board was waiting to see the next release of quarterly inflation data from the Australian Bureau of Statistics first before making more cuts.
Market predictions positive
12:16pm
Market predictions of a rate cut have been strong over the last few weeks, with a ‘double’ rate cut of 0.50% also priced in favourably.
As of 11 August, the indicator shows market expectations for an 0.50% rate cut to 3.25% at 51%.
Welcome to our coverage of the RBA cash rate announcement
12:01pm
Thanks for joining us today for our live blog ahead of the Reserve Bank of Australia’s (RBA) next decision on the cash rate.
The monetary policy board is concluding its two-day meeting and is set to announce whether the cash rate will remain at 3.85% or be lowered.
