The Reserve Bank of Australia's Monetary Policy Board decided on 4 November 2025 to leave the cash rate target unchanged at 3.60 per cent. The decision was unanimous and followed a hold at the previous meeting, after the Board cut the rate three times earlier in 2025, in February, May and August.
INFLATION PICK-UP KEEPS BOARD CAUTIOUS
The Board said inflation had fallen substantially from its 2022 peak but had recently picked up. Trimmed mean inflation was 1.0 per cent in the September quarter and 3.0 per cent over the year, up from 2.7 per cent in the year to the June quarter and materially higher than the RBA had expected at the time of its August Statement on Monetary Policy. Headline inflation rose to 3.2 per cent over the year, a large part of which the Board said had been expected given the end of electricity rebates in a number of states.
The Board judged that some of the rise in underlying inflation reflected temporary factors. The central forecast in the November Statement on Monetary Policy, based on a technical assumption of one more rate cut in 2026, has underlying inflation rising above 3 per cent in coming quarters before settling at 2.6 per cent in 2027.
DEMAND RECOVERING
The RBA said the pick-up in private demand seen in the June quarter was continuing and the housing market was strengthening, with housing prices rising. The unemployment rate rose to 4.5 per cent in September from 4.3 per cent in August, but the Board said labour market conditions still appeared a little tight, with job vacancies high and many firms reporting difficulty finding staff.
With private demand recovering and evidence of more persistent inflation, the Board said it was appropriate to remain cautious and to update its view of the outlook as the data evolve. It added that it would take some time to see the full effects of earlier cash rate reductions.