Our coverage of the RBA's cash rate decision has now concluded. The RBA has held the interest rates at 3.60%.
RBA governor Michele Bullock. Picture: Jeremy Piper
Thank you for joining us
4:15pm
This concludes our live coverage of the RBAs final cash rate decision of 2025. To recap, the RBA board has held the cash rate steady at 3.60% for the third month in a row.
Speaking in this afternoon’s press conference, governor Michele Bullock said the board had spent time discussing the emerging likelihood of rate hikes for 2026 and has not ruled out a raise in the near-term, including as soon as at its next meeting.
The bank’s board will not meet for another cash rate decision until February. Please join us again next month however as we cover the lead up to the first decision of the new year.
In the meantime, keep updated over the holiday period on realestate.com.au and Mortgage Choice, where we will have all the latest commentary on the decision, as well as forecasts and outlooks for next year from our in-house team of economists.
‘No rate cuts for the foreseeable’: RBA
4:10pm
Governor Michele Bullock has refused to put a probability on whether Australians will face rate hikes in the near-term or continue with a 3.60% cash rate.
Speaking this afternoon, Ms Bullock said: “With what we know at the moment, I don’t think there are interest rate cuts on the horizon for the foreseeable future. The question is, is it just an extended ‘hold’ from here, or is it a possibility of a rate rise. They are the two things the board will be looking closely at coming into the new year.”
The governor was cautious in facing questioning over whether the RBA had cut rates too many times throughout 2025.
“If you go back six or seven months ago, people were saying we needed to drop interest rates quite a lot because things were very soft. The board has been cautious and I think that has been borne out.”
Read more: Rates held at 3.60% as talk builds RBA may be forced to hike within months
Headline inflation to be high for another 12 months
3.57pm
Australians can expect headline inflation to remain above the RBA’s 2-3% target range for at least the next year, governor Bullock has revealed.
Discussing the possibility of cash rate hikes in 2026, Ms Bullock said headline inflation numbers are still being “swung around” by the roll off of electricity rebates and were unlikely to stabilise for 12 months.
“That said, what we are looking for with underlying inflation are some sort of clues as to whether or not the large increase in quarterly trimmed mean in the September quarter was a whole lot of unrelated one-off factors, or whether or not it was demonstrating that there is underlying capacity pressures in the economy,” she said.
“When we come back to things in February, we’ll be reassessing whether we think capacity is a bit tight, and we will be reassessing whether we think financial conditions are really just a little bit tight, or effectively not putting any downward pressure on inflation.”
RBA discussing rate rises for next year
3.46pm
Governor Michele Bullock has admitted the RBA board spent time at its most recent meeting looking at plans for rate hikes in 2026.
Addressing the media in her post-rate decision press conference, Ms Bullock said: “We did consider – and discuss quite a lot – the circumstances and what might need to happen if we were to decide that interest rates had to rise again at some point next year.”
The RBA’s statement confirms all board members voted for a hold decision today, despite the return of rising inflation in the economy. Ms Bullock has now also confirmed that the board did not even consider either a rate hike or a rate cut for December in its deliberations.
“There was no cut on the table and no one suggested that there be a cut,” she said. “We didn’t consider the case for a rate cut at all and we didn’t explicitly discuss a case for a rate rise at this meeting.”
RBA governor prepares for media questions
3.29pm
Michele Bullock is set to appear before the media shortly for her scheduled post-decision press conference, where she will outline the Reserve Bank board’s decision-making process and provide a summary of its economic outlook for 2026.
Ms Bullock will face intense scrutiny as she answers questions about how the board plans to respond to a potential new spike in inflation. She will also be expected to explain how the RBA intends to adjust its forecasts given the unpredictable nature of December’s consumer spending and employment patterns, which often fluctuate during the holiday season.
Throughout 2025, Ms Bullock has maintained a cautious approach to managing inflation, emphasising the importance of avoiding rash decisions. This stance will give her breathing room from criticism to reinforce the board’s messaging about patience and measured responses.
However, with another inflation increase appearing likely, both markets and the public will be looking for clearer, more decisive signals from the RBA.
‘No relief for households’: Rate hold criticised
3:14pm
The Real Estate Institute of Australia (REIA) has criticised the RBA’s decision to leave the cash rate untouched, saying it is an unfortunate outcome for households despite being an expected move in line with market expectations.
President Jacob Caine said the hold scenario “offers little relief for households under financial strain” as the expensive Christmas period and end of year approaches.
“Today’s pause does not ease the pressure on mortgage holders,” he added. “With inflation still high and the labour market right, rate cuts are unlikely in the near term, meaning housing affordability pressures will continue into 2026.”
The REIA is calling for positive supply-side measures to combat the current pressure on households. In line with its previous messaging, the institute is calling for more build-to-rent projects, planning reforms and further social and affordable housing programs to improve housing affordability across the country off the back of this latest cash rate decision.
RBA: Global economy concerns are significant
3.01pm
Concerns around how the global economy is faring continue to be of concern to the RBA – a key issue flagged by the board today in the statement which accompanied its decision to hold the cash rate.
“Uncertainty in the global economy remains significant,” it read. “[The board] 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.”
Despite this, the statement also confirmed geopolitical issues have caused “minimal impact on overall growth and trade in Australia’s major trading partners” so far. The board has continuously flagged risks in the international economy this year, noting the volatility associated with war in Ukraine and the Middle East.
It comes as the Federal Reserve prepares to cut rates in the US this week, while the Bank of England is also tipped to provide more easing in Britain before the end of the year when it meets on 18 December.
Rate hold due to ‘uncertain’ new inflation data
12.46pm
The Reserve Bank has said the ABS’ all-inclusive CPI data is not yet established enough for it to use as an accurate measure for whether rates need to go up.
In a statement accompanying today’s decision to hold the cash rate at 3.60%, the RBA board said the new inflation spike is “due to temporary factors” and that there is “uncertainty about how much signal to take from the monthly CPI data given it is a new data series”.
It comes after the November CPI confirmed both headline and underlying inflation are outside of the RBA’s 2-3% target range.
“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,” the statement read. “There are uncertainties about the outlook for domestic economic activity and inflation and the extent to which monetary policy remains restrictive.”
Cash rate held at 3.60%
2:30pm
The cash rate has been held at 3.60% today, in line with expectations. It marks the third time in a row that the RBA has opted not to make any change to the rate.
The decision comes amid mixed economic signals, with recent data showing inflation remaining elevated while employment conditions show signs of softening. Although many borrowers may have anticipated a cut up until recently, the board’s decision to maintain the current rate signals caution and is in line with market expectations.
This was the board’s final meeting for 2025, concluding its two-day deliberations. The accompanying statement, expected shortly, will provide further insight into the factors driving the decision, including the bank’s outlook for inflation, growth, and labour market conditions.
It will also detail the level of consensus among board members and highlight any differing views, offering the market a clearer picture of the RBA’s policy stance as it heads into 2026.
Read more: RBA keeps interest rates on hold at 3.6% as hike forecasts grow
Christmas spending likely to speed up inflation rise
2:14pm
The likely scenario of a rate hold in the next few minutes could come at a great cost for borrowers as we head into the new year.
Inflation often shows an uptick during the Christmas period, driven by a combination of seasonal demand and supply dynamics.
The RBA will be expecting households to spend big on gifts, food, travel, and entertainment in the coming weeks, while demand for goods and services usually also rises sharply in December. Seasonal promotions and limited time offers can also contribute to skewed inflation figures as businesses adjust to public spending patterns in the lead up to Christmas.
All this generally leads the bank to be cautious this time of year, with only one rate change — a 0.25% rise in 2022 — recorded in the last ten years of December meetings. The case for a rate rise remains very much in play, so we could see the RBA buck the trend.
Economist view: Hold decision expected
2:04pm
Having underestimated the recent rise in inflation in its forecasting, it’s not expected we will see a cut or a hike today. It’s anticipated the RBA will use the cash rate to help nudge inflation downwards, in line with its fiscal objectives. It’s also rare for the bank to make any change to the cash rate either way in December.
REA Group senior economist Eleanor Creagh said: “The RBA will need clear evidence that inflation pressures are easing once more before cutting rates again.”
Interest rates have already moved 75 basis points lower this year, marking a positive overall outcome for borrowers. Moving forward into next year, the outlook is less clear, with expectations that the current rate of 3.6% is likely here to stay for several months.
Should inflation continue to rise however, mortgage holders could be set for a jump in repayments as the cost of servicing their loan increases.
Bullock admits RBA is dropping the ball
1:45pm
The bank’s failure to keep inflation within its target range has seen governor Michele Bullock on the receiving end of plenty of criticism in recent weeks.
Most recently, Ms Bullock faced a barrage of questions when appearing at a Senate Estimates hearing, where she acknowledged the bank had not yet successfully tamed inflation.
While Ms Bullock has consistently communicated the importance of the board’s ‘dual mandate’ — that it priorities both price stability and full employment — she admitted to having been focused primarily on the latter during the year.
“Inflation has been out of target for a number of years, that is very, very true," she said. "That is why the board has always said they want to get it back, but they want to get it back in a reasonable time and the reason for that is inflation expectations. Have we done it yet? No, we haven’t done it yet.”
Big banks have wound in expectations
1:31pm
After a rocky couple of months, all four big banks have re-assessed their expectations for the cash rate trajectory. Commonwealth Bank (CBA), National Australia Bank (NAB), ANZ, and Westpac are all agreed that today’s decision will be a hold.
Economists at CBA are now anticipating a prolonged period with rates at 3.60%, winding back expectations for a cut to the middle of next year. Likewise, ANZ have scrapped any earlier predictions for rate cuts in the near term. Off the bank of rising inflation, the bank now expects rates to stay on hold and has ruled out with cuts or hikes for the next few months.
Westpac is the most positive of the big four going into this afternoon’s decision, holding on to its prediction for a rate cut next May.
NAB is on a more conservative route, anticipating further easing will not be on the cards for borrowers until after May.
Home prices up 8.7% since this time last year
1:12pm
While the three rate cuts this year have helped increase borrowing capacities for expectant buyers, those looking to jump on the ladder or move are now grappling with an 8.7% rise in the cost of a median-priced home compared with 12 months ago.
The latest PropTrack Home Price Index confirms a 0.5% rise in November alone, with monthly gains across the country pushing national values to a fresh record high. The value of a typical home has jumped $77,900 in the past year to reach $873,000.
Underlying factors include limited supply, relatively strong demand, and improved buyer borrowing capacity. As a result, many homeowners are seeing significant equity gains, though affordability remains a challenge for prospective buyers.
With the market already facing a new inflation spike, the uncertain outlook could also see bowering costs increased and slower market competition.
Case for a rate hike very much on the table
1:02pm
A rate hold is almost inevitable if we are to go off market predictions, though a cash rate increase from the RBA this afternoon is not out of the question. Several key data points point in that direction, notably the sticky inflation that currently has both headline and underlying inflation outside of the bank’s all-important 2-3% target range.
Consumer demand and spending remain relatively strong with Christmas just around the corner however, meaning pressure on prices could persist unless borrowing costs are pushed higher to dampen demand.
While the labour and jobs markets are still in relatively stable positions, RBA governor Bullock has been under increasing pressure in recent weeks to make a quicker and more tangible impact on the market.
Critics have noted inflation has failed to be held within the bank’s target for the majority of quarters in the past five years as the country continues to recover from the economic fallout caused by Covid-19.
Inflation uptick continuing to raise concerns
12:45pm
Rising headline and underlying inflation became apparent in the lead up to the bank’s November board meeting after September quarter figures were published. This has continued to be a problem in the weeks since, with the latest data from the Australian Bureau of Statistics (ABS) confirming a trend.
Trimmed mean inflation, which leaves out volatile and one-off price movements, rose to 3.3% annually in October. This was up from 3.2% annually in September, with housing identified as the biggest contributor.
The data was the ABS’ first release of the “complete” monthly Consumer Price Index as it moves from a quarterly to monthly measure.
The higher-than-expected inflation figures make the prospect of a rate cut in the near future very unlikely. However, the minutes of the November RBA board meeting note the board could find itself in a situation where it is forced to cut rates if the jobs market weakens from its current state.
Markets pricing in a hold with certainty
12:27pm
The latest data from the Australian Stock Exchange shows that market expectations of a 25-basis-point cut to the cash rate are sitting at just 3% as of 4 December.
The RBA Rate Indicator calculates the probability of a rate change using market-determined pricing from the ASX 30-Day Interbank Cash Rate Futures. Its readings have remained broadly unchanged since mid-November and the release of the most recent Consumer Price Index figures.
With a 97% chance of a hold decision today, borrowers can approach Christmas and the end of the year with confidence that their home loan repayments are unlikely to shift in the immediate future. Stable rates provide welcome certainty during a period when household budgets are often under extra pressure.
However, if the RBA were to raise the cash rate by 0.25%, a borrower with a $500,000 mortgage at a current rate of 5.76% would see their repayments increase by around $80 a month.
RBA prepares to wrap up a rollercoaster year
12:13pm
Today’s meeting will mark the final cash rate decision for 2025, wrapping up what has been a volatile and rapidly changing year for monetary policy both in Australia and overseas.
The RBA’s first meeting of the year in February saw a long-awaited cash rate cut, bringing an end to a four-year dry spell for relief. The rate was lowered again in May to 3.85%, before being trimmed further to 3.6% in August.
Each cut decision this year has been interspersed with a hold. Decisions have been largely in line with governor Michele Bullock’s repeated messaging that the board would look to cut gradually and sustainably to try and avoid inflation rising again.
Despite this, a pickup recorded in the September quarterly inflation data has caused all likelihood of further easing to grind to a premature halt. If the rate isn’t held at 3.6% today, markets agree it is more likely to go up than go down.
Welcome to our live coverage of the cash rate decision
12:01pm
Over the next few hours, we’ll be bringing you real-time updates, commentary and forecasts as we wait to hear whether the cash rate will stay at 3.60% or perhaps be raised for the first time in more than 12 months.
After holding steady at its last meeting in November, pressure has mounted on the Reserve Bank of Australia (RBA) thanks to sticky inflation and more resilience in the economy. The present situation is a dramatic departure from forecasts only a few months ago anticipating the bank would use its final meeting of the year to make an historic fourth cut for 2025.
However, inflation is not likely to be deemed sufficiently under control to support lower borrowing costs, meaning a hold decision is far more likely.
We will look at what that means for borrowers, savers, homeowners and the broader economy as we wait to hear from the RBA for the final time this year.
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