MNI RBA Preview-Aug 2025: Cautious August Rate Cut

Download Full Report Here

EXECUTIVE SUMMARY: 

• The RBA’s Monetary Policy Board is unlikely to surprise economists and the market again in August when its decision is announced on Tuesday August 12. Bloomberg consensus is unanimous forecasting a 25bp rate cut to 3.60% given the further moderation in underlying inflation in Q2 towards the band mid-point, which should increase confidence that it is now sustainably within target, and signs that the labour market has reached a turning point.
• Thus, the “timing” this month is likely to be more suitable than last month possibly resulting in a 9-0 vote after July’s 6-3 split in favour of holding.
• With the economy broadly developing as the Board expected in May, there are unlikely to be material changes to the updated forecasts accompanying the August statement.
• The tone of the decision and Governor Bullock's press conference is likely to reiterate the bank's gradual and cautious approach to easing. We expect any further cuts to coincide with forecasting meetings.