Key Points
- The Reserve Bank of Australia will announce its decision on interest rates at 2.30pm on Tuesday.
- All four of Australia's major banks are predicting the bank will keep the cash rate on hold at 4.35 per cent.
- Economists also agree the bank will likely keep rates on hold.
It's highly unlikely the Reserve Bank of Australia (RBA) and vote to cut interest rates at its latest meeting, economists say.
Instead, economists largely agree the central bank will opt tot, where it has sat since November.
All 42 experts surveyed by comparison site Finder for its September rate survey said the bank would keep rates on hold.
Nearly two-thirds of panellists said they believed the bank would cut rates in February, as it continues to pursue a hard-line stance of getting inflation within its target range of 2-3 per cent.
The Australian Securities Exchange's (ASX) RBA rate tracker puts the chance of the bank voting to cut rates at its meeting on Tuesday at just 10 per cent.
Source: SBS News
Eslake expects cuts to start in February and doesn't think easing in other countries, including Canada and New Zealand as well as the US, will prompt the RBA to follow suit.
"They all put their rates up a lot more than the RBA did, and they all put them up earlier than the RBA did too," he said.
And unlike those other countries, Australians were getting tax cuts boosting aggregate household incomes equivalent to a cut of 0.5 per cent.
"Why would the Reserve Bank double up on that?" Eslake said.
Three of Australia's big four banks are predicting the earliest rate cut will be in February.
Only the Commonwealth Bank forecasts a rate cut in December — last week it revised its earlier prediction of a November cut, citing steady employment figures and the RBA's reluctance to lower rates.
Source: SBS News
The Greens said they wouldn't support the government's proposed until rates were brought down.
How much are interest rates costing Australians?
RBA Housing Loan Payments data shows Australian borrowers were collectively charged around $14.5 billion on their home loan repayments in June.
As much as 66 per cent of these repayments were interest charges, according to Canstar analysis.
Monthly repayments increased by an estimated $5.5 billion compared to March 2022, when an estimated $9 billion was charged.
Canstar’s data insights director Sally Tindall said cash rate cuts: "will be music to borrowers’ ears but the RBA is unlikely to move any time soon".
"It’s incredible to think Australian borrowers are having to shell out an extra $5.5 billion a month in mortgage repayments. What’s even more incredible is that most households are managing to make it work".
With additional reporting by AAP.
