In a statement following its two-day meeting, the bank board confirmed the official cash rate would remain at 4.35 per cent.
The last time the bank increased the cash rate was in November last year.Ahead of the meeting, markets had put the chance of a rate cut at 12 per cent. The same markets, however, expect the bank to cut rates by its December meeting, with a 2-in-5-chance they could be reduced by half a percentage point.
It now expects underlying inflation, its preferred measure of price movements, which strips out the effect of particularly big price changes, to return within its target range of 2 to 3 per cent in late 2025, slightly later than it forecast in May.The headline inflation figure would drop temporarily to 3 per cent by December this year and 2.
This stronger consumption growth would help bolster Australia’s economic growth, the board said, putting the economy on track to recover more strongly than forecast three months ago. The board increased its forecast for economic growth in the year to December to 1.7 per cent, up from 1.6 per cent in its last statement, and from 2.1 per cent to 2.6 per cent for the year to June 2025.
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