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🇦🇺 Australia /Economy & Trade

Live: Poll of economists expects RBA to leave cash rate unchanged Tuesday

From ABC Australia · () English

Summarized and contextualized by DistantNews.

At a glance

Newswire From a news agency New plan
  • All 37 economists polled expect the Reserve Bank of Australia (RBA) to keep its cash rate unchanged at 4.35% at its upcoming meeting.
  • Inflation has eased due to higher borrowing costs slowing economic activity and falling oil prices, though it remains above the RBA's target.
  • Most economists predict the rate will remain unchanged through the end of the year, with a minority previously expecting further hikes.

Australia's leading economists overwhelmingly anticipate that the Reserve Bank of Australia (RBA) will maintain its current cash rate of 4.35% following its upcoming meeting. A poll of 37 economists revealed a unanimous expectation that the rate will remain unchanged.

This consensus stems from a cooling economy, influenced by elevated borrowing costs and a decline in oil prices in June. While annual inflation at 4.0% last quarter still exceeds the RBA's 2%-3% target, underlying price pressures are showing signs of easing. Economists believe current monetary policy is sufficiently restrictive to guide inflation back towards the target range.

It looks like inflation, although it is high, is trending in the right direction. And there are signs of easing demand pressure in the economy.

— Nick StennerHead of Australia and New Zealand economics at Bank of America, explaining the rationale for holding rates steady.

Looking ahead, the majority of economists surveyed predict the cash rate will hold steady through the remainder of 2026. This sentiment reflects a shift from earlier expectations, where a portion of economists had anticipated further rate hikes. The RBA's decision will be closely watched as policymakers continue to assess the impact of previous rate increases on economic activity and inflation.

In other financial news, building products manufacturer James Hardie reported a significant 54% increase in its first-quarter profit, driven by a recovery in its North American market. The company's adjusted net income surpassed analyst expectations, signaling resilience in the sector.

With policy in restrictive territory I think they've got the evidence they need to be patient and just hold the cash rate for the time being.

— Nick StennerHead of Australia and New Zealand economics at Bank of America, commenting on the RBA's current policy stance.
DistantNews Editorial

Originally published by ABC Australia. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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