RBA interest rates live updates: Homeowners face nervous wait on post-call commentary after today’s hold

The recent data suggest the risks to inflation have tilted to the upside, but it will take a little longer to assess the persistence of inflationary pressures.

That’s RBA speak for “we’re ruling anything in or out”.

“The board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions.

“In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.

“The board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.”

Today’s policy-setting statement could be the most important since the RBA started cutting rates earlier this year.

With the prospect of a rate hike on the cards next year, here’s what the central bank board had to say today ...

“While inflation has fallen substantially since its peak in 2022, it has picked up more recently.

“The board’s judgement is that some of the recent increase in underlying inflation was due to temporary factors and there is uncertainty about how much signal to take from the monthly CPI data given it is a new data series.

“Nevertheless, the data do suggest some signs of a more broadly based pick-up in inflation, part of which may be persistent and will bear close monitoring.”

That means the RBA is alert to factors other than the usual CPI volatility and is a sign some adjustment higher next year could be warranted if the data backs it up.

Bad sign for homeowners.

As expected, Michele Bullock’s RBA board has decided there’s no room for a rate cut as resurgent inflation spikes above its comfort zone of between 2 and 3 per cent.

While spending figures show households are splashing the cash, there’s still plenty out there doing it tough and todat call will offer no relief for families still struggling to make ends meet.

We’ll hear more from Ms Bullock in an hour on where she thinks the economy is headed ... and if a rate rise may be on the cards next year.

A pre-Christmas spending splurge and the widening Federal deficit have sparked fears interest rates may have to be hiked to levels last seen almost two decades ago.

Household spending increased 1.3 per cent in October, the biggest monthly increase in almost two years and more than double the rate economists expected.

Ironically, the buying spree was prompted by three interest rate cuts this year, which some economists say may have to be reversed to stamp out inflation.

Seventy-five basis points of rate increases would return the cash rate to 4.35 per cent and cost the average home owner about $4000 a year.

Judo Bank chief economic adviser and former Treasury economist Warren Hogan predicted rates would continue to rise to 5.1 per cent, the highest level since 2008, a pessimistic forecast many economists don’t agree with.

READ MORE HERE ...

We’re just 30 minutes away from hearing what the RBA plans to do next.

They’ll be no cut today, but homeowner will want to hear if the RBA agrees with some punters that it could be forced tolift rates next year.

Australian business confidence declined further in November ahead of the Reserve Bank’s final policy meeting of the year.

Confidence dropped 5 points to one point last month, its second-straight fall, a National Australia Bank survey showed today. Conditions, which track sales, profitability and employment, declined by 3 points as weakness in trading and profitability overwhelmed a slight gain in employment.

The report showed capacity utilisation in the economy edged up to 83.6 per cent, the highest level in 18 months.

“The survey continues to tell us that businesses are capacity constrained,” said Sally Auld, chief economist at NAB. “If economic growth accelerates further from the current starting point, we may quickly see additional pressure on prices.”

The reading on corporate Australia arrives just hours before the RBA is anticipated to hold its key rate at 3.6 per cent.

Other key data points:

• The employment index continues to track broadly sideways, consistent with stability in labour market conditions into year-end, the report showed
• Conditions in WA retraced strong gains from October
• Purchase cost growth rose to 1.3 per cent in quarterly equivalent terms

Bloomberg

With no more RBA rate relief expected this year, or next, c Canstar says borrowers should use the time over summer to check whether they can capitalise on the equity in their property to secure a lower rate.

New research from the omparison site shows the majority (62 per cent) of lenders reserve their lowest refinancing rates for owner-occupiers who own at least 30 per cent of their property.

Out of the 10 lowest variable rates, nine require borrowers to own at least 30 per cent and six require at least 40 pe rcent.

The good news is that with the massive rise in property values, many borrowers likely fall into this bucket.

Here’s the best deals on the market right now ...

Looking at CBA’s full-year results, Canstar reckons the average borrower owns more than 58 per cent of their property at today’s values. Similarly, Canstar’s 2025 Consumer Pulse Report found borrowers estimated their home equity at 65 per cent.

“Borrowers with a mortgage should not plan for any further rate relief in 2026, and instead, start preparing for a potential hike, just in case one materialises later next year,” says data insights director, Sally Tindall.

“Take 10 minutes in the lead up to Christmas to check your equity. Work out how much you still owe on your mortgage, minus this from a current estimate of how much your property is worth and there’s your equity.

“Right now, a competitive owner-occupier rate is under 5.25 per cent, while a highly competitive one is under 5.14 per cent. Anything above this should be a cue to shop around.

“Refinancing to a different lender might not be on the agenda for your summer holiday, but the short-term investment could end up paying for your entire summer holiday next year.”

If you put any stock in what the big banks think, here’s what they believe will happen next ...

ANZ is holding on to its prediction that they’ll be another 25 basis-point cut to come in early 2026.

Westpac is more optimistic, tipping two cuts of 25 basis-points - one in May and another to follow in August.

Commonwealth Bank - the nation’s biggest mortgage lender - and NAB reckon the RBA is now done for this cycle.

Punters on the ASX are the biggest bears, pricing in the possibility of a 25 basis-point increase in the official cash rate back to 3.85 per cent by May next year.

There is a reasonable argument that the RBA has cut too far already.

That was the grim warning from HSBC economist Paul Bloxham yesterday ahead of today’s rates decision.

But he warned that reversing course (and lifting rates) would possibly damage the central bank’s credibility.

Could it be worse than when former governor Philip Lowe suggested in late 2020 that the “board is not expecting to increase the cash rate for at least three years”?

Maybe.

Governor Michele Bulloch has won praise for her straight-talking approach since taking the helm so it’s more likely maintaining the strength of the economy will come way ahead of risking bruised egos.

The Aussie share market is trading lower as investors await the Reserve Bank’s final decision on interest rates for the year.

The S&P/ASX200 had dropped 18.2 points just before 1pm AEDT, down 0.2 per cent to 8606.2.

The move tracked a weak session on Wall Street, where there is uncertainty ahead of the US Federal Reserve’s own interest rate decision later in the week.

“While markets remain confident a US rate cut will happen this week, investors are uncertain how deep and sustained easing may be next year,” Moomoo market strategist Jimmy Tran.

“So they’re moving to lock in gains rather than add fresh exposure into year-end.”