MNI RBA Preview-November 2025: CPI Outlook Key To Rates

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EXECUTIVE SUMMARY: 

• The Q3 trimmed mean print at 3.0% y/y up from 2.7% and at the top of the 2-3% target band was a “material miss” for the RBA and meant that the Board is now highly likely to leave rates at 3.6% at its 4 November decision. 
• The Board is likely to remain highly data dependent and cautious given inflation’s renewed shift higher and the emerging domestic recovery but easing labour market conditions. 
• Updated staff forecasts will be released and the underlying inflation path is likely to be the focus to see how far out the return to the 2.5% band mid-point has been pushed out.
• The Board will need to see inflation resuming its trend lower towards 2.5% before it is likely to consider cutting rates again. Thus, rates are probably on hold in December and the Q4 CPI data on 28 January will be a key input into the 3 February decision.