Interest Rate Reduction – August 2025
The RBA today enacted a 0.25% cut in the cash rate to 3.60%, responding to a notable slowdown in domestic price pressures and a rise in the jobless rate. Inflation has cooled to about 2.1%, its lowest in four years, while unemployment reached 4.3% in June.
The central bank’s decision comes amid growing signs that aggregate demand is weakening.
Data from the June quarter shows household spending rose modestly—0.5%—primarily due to buoyant goods consumption, while services spending dipped.
Meanwhile, business confidence climbed to its highest point since 2022, buoyed by resilient activity in services and construction.
These mixed signals likely influenced the RBA’s balanced move: easing to support growth without risking inflation resurgence.
For consumers, especially homeowners, the rate cut provides welcome breathing room. Market forecasts now anticipate further reductions by year-end, meaning relief may be on the way—but a lot hinges on whether economic activity picks up sustainably.
If you would like to discuss the above or your current interest rate please contact us at team@firstpointgroup.com.au
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