Live: Interest rates announcement. Will RBA cut rates?

Follow along for our live coverage of the RBA rates decision.

Slow economic growth amid global uncertainty

1:31pm

The RBA’s rate decision is set against the backdrop of Australia’s sluggish economy, with weakened consumer demand and subdued wage growth. 

Meanwhile, global trade uncertainty has “adversely changed the outlook for growth in Australia’s major trading partners”, the RBA board noted in minutes from its last meeting in May.

In short, the economy isn’t exactly firing on all cylinders, and trade turmoil isn’t helping the situation.

Home prices reach new records

1:16pm

Property markets have already responded to the two rate cuts delivered this year, with prices expected to keep rising if rates are cut further.

Australia’s national median home value reached a record high in June having increased 4.6% in the past year, according to the latest PropTrack Home Price Index.

REA Group senior economist Eleanor Creagh said price momentum has strengthened and extended across the country as interest rates have fallen

“Further interest rate cuts expected later this year will continue to ease borrowing costs, adding to the momentum in housing demand and reinforcing recent price growth,” she said.

Big bank rate predictions

1:02pm

The big four banks are all tipping the RBA to cut the cash rate when the board meeting concludes at 2:30pm today, with further cuts expected this year.

ANZ head of Australian economics Adam Boyton expects back-to-back rate cuts in July and August, although flagged that today’s meeting “will be a much closer call than market pricing would suggest.”

Commonwealth Bank senior economist Belinda Allen said a cut was “not a done deal” but said there was a stronger case to cut rather than leave rates on hold.

Inflation remains tamed

12:47pm

The latest monthly inflation indicator from the Australian Bureau of Statistics shows trimmed mean inflation was 2.4% in the year to May – well within the RBA’s 2-3% target band.

Inflation has remained below 3% since entering the target band in December last year, which opened the door for the easing cycle to begin. 

The RBA’s forecast is for inflation to remain at the midpoint of the target band until at least mid-2027.

What are markets predicting for today?

12:23pm

Financial markets are pricing in a near-certainty of a 0.25% rate cut today, according to the  Australian Stock Exchange’s rate indicator.

As of 7 July, it suggests a 97% chance of a quarter of a percentage point rate cut, with two more cuts priced in before the end of the year.

Welcome to our live coverage of the RBA’s rates decision

12:02pm

Hello and welcome to our live coverage of today’s cash rate decision.

After a 0.25% cut at its last meeting in May, the Reserve Bank of Australia is widely predicted to announce another cut later this afternoon.

The current cash rate is 3.85%, having been cut twice this year in February and May.

Reserve Bank Governor Michele Bullock will announce the RBA’s decision later today. Picture: NewsWire / John Appleyard

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