RBA seen holding steady as inflation delay pushes next rate cut to 2026
The Reserve Bank of Australia is set to keep the cash rate unchanged at 3.60% at its November 4 meeting, as stronger-than-expected inflation data forces economists to push back forecasts for the next policy easing to mid-2026, according to a Reuters poll.
That inflation data, ICYMI:
- Australian Q3 Core inflation (trimmed mean) +1.0%
- Australian dollar jumped after very strong CPI data, November RBA rate cut off the table
All 34 economists surveyed expected the RBA to hold next week, with most saying stubborn price pressures have effectively closed the door on near-term rate cuts. Median forecasts now show the first and likely final cut of the current cycle occurring in the second quarter of 2026, compared with earlier expectations for late 2025.
Headline CPI rose 3.2% year-on-year in Q3, above the RBA’s 2%–3% target band, while core inflation jumped 1.0% for the quarter, exceeding the central bank’s own forecast of around 0.6%. Governor Michele Bullock said even a 0.9% rise would be a “material miss” that the board would need to weigh when setting policy.
“The picture is now different,” said NAB’s Taylor Nugent, noting that the RBA had been cutting because inflation had allowed it to normalise policy. “Q3 inflation data is a pretty clear warning shot … they’ll be on hold for a while.”
Despite unemployment rising to 4.5%, economists said the RBA will prioritise inflation control over labour softness. A large majority also expect rates to stay on hold through December.
