RBA keeps cash rate steady at 3.6%, watches future inflation data closely, no relief in mortgage repayments News Air Insight

The Reserve Bank of Australia (RBA) has decided to keep the official cash rate steady at 3.60% in its November 4, 2025 meeting, marking a continuation from the previous meeting’s decision. This move comes after a 0.25% rate cut in August 2025 and signals the RBA’s cautious approach amidst mixed inflation signals and economic uncertainty.

According to the RBA board’s statement, inflation has shown a substantial decline since its 2022 peak, attributing this to the higher interest rates curbing aggregate demand and moving it closer to potential supply.

However, recent data indicates a surprising uptick in inflation levels; trimmed mean inflation was recorded at 1.0% for the September quarter and 3.0% over the year, which is higher than the 2.7% seen in the June quarter. Headline inflation rose sharply to 3.2% over the year in the September quarter, partly due to the cessation of electricity rebates in several states.

Economists see the current inflation trend as a cause for concern. Belinda Allen, head of Australian economics at CBA, emphasized that the inflation rise will likely prompt the RBA to adopt a more hawkish stance to avoid lapsing back into higher inflation. This sentiment is supported by the revised forecasts from major banks like ANZ and NAB, which have downgraded expectations for any near-term rate cuts until at least early to mid-2026.

Michele Bullock, RBA Governor, highlighted in her recent statements that the recent decline in headline inflation might be temporary due to rebates on electricity, and warned that further rate cuts would depend heavily on sustained low inflation data.

The decision to hold rates means that Australian homeowners and borrowers will not see immediate relief in mortgage repayments, which has prompted concerns over household budget pressures with high mortgage costs persistently squeezing finances. Consumer researchers noted that while a rate cut is expected eventually, the timing remains uncertain and many households will face financial stress through what is typically a festive spending season.The RBA also indicated that the economy remains closely watched, and policy will continue to be data-dependent, leaving the door open for future adjustments should inflation dynamics or labor market conditions change significantly. Current market pricing suggests minimal chances of easing before mid-2026, reflecting the cautious economic outlook.