Australian Inflation Eases, Indicating RBA Rate Cuts May Follow

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Declining housing inflation significantly contributes to this disinflationary trend. Lower rents and new home prices have been identified as key factors supporting the fall in the trimmed-mean inflation. The NAB business survey and S&P PMIs further confirm this pattern, showing a consistent disinflation process in February and March.

Additionally, wage data aligns with this downward inflation trend. The Q4 2024 Wage Price Index (WPI) exhibited growth of only 0.65% for the quarter, marking it as the most subdued quarterly increase since the start of 2022. This element of wage data supports the notion that inflationary pressures are easing.

The implications for the Reserve Bank of Australia (RBA) are significant. With softer-than-expected inflation and wage data, the RBA appears poised to lower interest rates. Economists widely anticipate a rate cut at the RBA’s May board meeting, contingent upon the Q1 CPI findings. The market anticipates further rate reductions throughout the year, suggesting a proactive approach from the RBA to support economic stability.

The combination of easing inflation and moderated wage growth bodes well for consumers and businesses, potentially enhancing purchasing power and stimulating economic activity. As the financial landscape adjusts to these changes, all eyes will be on the RBA’s forthcoming decisions and how these will shape Australia's economic trajectory.

Published:Tuesday, 1st Apr 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Finance News

Clear

Macquarie Bank's Strategic Alliance with Mortgage Brokers Fuels 28% Growth in Home Loan Portfolio

27 May 2026: Paige Estritori

In a notable development within Australia's mortgage sector, Macquarie Bank has reported a substantial 28% increase in its home loan portfolio, reaching $181.3 billion as of 31 March 2026. This growth is primarily attributed to the bank's strategic collaboration with mortgage brokers, who were responsible for originating over 95% of new home loans during the financial year. - read more

Understanding the Impact of the RBA's May 2026 Cash Rate Increase on Home Loans

27 May 2026: Paige Estritori

On 5 May 2026, the Reserve Bank of Australia (RBA) announced a 25 basis point increase to the official cash rate, bringing it to 4.35%. This marks the third consecutive rate hike this year, reflecting the central bank's efforts to address rising inflation and economic growth concerns. - read more

Over Two Dozen Lenders Maintain Home Loan Rates Amid RBA Hike

19 May 2026: Paige Estritori

In the wake of the Reserve Bank of Australia's (RBA) recent decision to increase the cash rate by 0.25 percentage points, a notable segment of the lending market has chosen a different path. Over two dozen lenders, including prominent names like Citi and RAMS, have yet to implement corresponding hikes in their home loan interest rates. This divergence presents a unique opportunity for borrowers seeking stability amidst a climate of rising rates. - read more

APRA Introduces New Cap on High Debt-to-Income Home Loans

11 May 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has implemented a significant policy change aimed at bolstering financial stability within the housing market. Effective from 1 February 2026, APRA has imposed a cap limiting banks to issuing no more than 20% of new home loans to borrowers with a debt-to-income (DTI) ratio of six times or higher. This measure is designed to curb the rise in high-risk lending practices and mitigate potential vulnerabilities in the financial system. - read more

Australian Banks Respond to RBA's Interest Rate Increase

11 May 2026: Paige Estritori

In response to the Reserve Bank of Australia's (RBA) recent decision to raise the official cash rate by 0.25 percentage points to 3.85%, Australia's major banks have announced corresponding increases in their home loan variable interest rates. This move marks the first cash rate hike in two years and reflects the central bank's efforts to address rising inflation and economic growth concerns. - read more

Click for more Finance News