Skip to main content Skip to log on Skip to search Accessibility at CommBank

CBA Senior Economist Belinda Allen today published a preview ahead of next Tuesday’s RBA rates decision – below is an overview of Ms. Allen’s views.

Key Takeaways

  • RBA is expected to cut the cash rate by 0.25 percentage points to 3.60 per cent.
  • Inflation is easing, with prices rising more slowly than earlier in the year.
  • Another rate cut is likely in November, with a possible follow-up in early 2026.

The Reserve Bank of Australia (RBA) is expected to lower interest rates next Tuesday, with markets fully pricing in a 0.25 percentage point cut to 3.60 per cent. This would be the third rate cut in the current cycle, as inflation continues to ease and the job market remains steady.

The latest trimmed mean inflation figures show prices rose just 0.6 per cent in the June quarter, down from 0.7 per cent in the March quarter. Trimmed mean inflation is the RBA’s preferred inflation measure, removing the biggest price rises and falls to give a clearer picture of underlying trends. The annual rate of trimmed mean inflation is now 2.7 per cent, which is within the RBA’s target range of 2–3 per cent.

“Recent inflation and labour force data reinforce that the economy is performing as expected,” said Belinda Allen, Senior Economist at CBA.

“This gives the RBA confidence to continue its cautious easing cycle - a rate cut next week is a done deal.”

Jobs Data in Line with Forecasts

Unemployment rose slightly to 4.3 per cent in June, taking the June quarter average to 4.2 per cent, in line with RBA forecasts. The labour market remains relatively tight, but not enough to delay further easing.

More Cuts Likely

Another rate cut is expected in November, and a further reduction in early 2026 is possible if inflation continues to slow. The RBA is likely to move gradually, with some Board members still cautious about inflation risks.

Forecasts Largely Unchanged

The RBA’s updated forecasts are expected to show little change. Economic growth may be revised slightly higher due to stronger housing investment and lower interest rates. Consumer spending remains patchy, but signs of recovery are emerging.

See here to read CBA Senior Economist Belinda Allen’s full analysis.

Go to CBA Newsroom for the latest news and announcements from Commonwealth Bank.

Tags

Things you should know

  • Media releases are prepared without considering an individual reader’s objectives, financial situation or needs. Readers should consider the appropriateness to their circumstances. Visit Important Information to access Product Disclosure Statements or Terms and Conditions which are currently available electronically for products of the Commonwealth Bank Group, along with the relevant Financial Services Guide. Target Market Determinations are available here. Loan applications are subject to credit approval. Interest rates are correct at the time they are published and are subject to change. Fees and charges may apply.