Monetary Policy Decision

Media Conference – 4 NOVEMBER 2025

Decision
The cash rate target was unchanged at 3.60 per cent. The policy decision was unanimous.

Inflation
Inflation has recently picked up. In the September quarter, trimmed mean (underlying) inflation rose to 1.0 per cent for the quarter and 3.0 per cent annually, up from 2.7 per cent in the June quarter and above earlier expectations. Headline inflation also climbed sharply to 3.2 per cent over the year, largely driven by the cessation of electricity rebates in several states. The Board considers part of the rise in underlying inflation to be temporary.

Economic and Labour Market Conditions
Recent data show private demand continues to strengthen following the June quarter pick-up, supported by readily available credit to both households and businesses. The interest rate reduction in August is having an effect. Labour market conditions remain a little tight despite easing, with employment growth slowing more than expected and the unemployment rate rising to 4.5 per cent in September, while underutilisation remains low and job vacancies high. Wages growth has eased from its peak, but weak productivity is keeping unit labour costs elevated. Uncertainty persists regarding the outlook for inflation and domestic economic activity. Global economic uncertainty also remains high, but so far there has been minimal impact on growth and trade among Australia’s major trading partners.

Monetary Policy Stance
Recent inflation data indicate that some inflationary pressures may persist. With private demand recovering and the labour market still somewhat tight, the Board decided that it was appropriate to keep the cash rate target unchanged. Although financial conditions have eased since early this year, the full effects of earlier rate cuts will take time to materialize. The Board remains alert to heightened uncertainty about the economic outlook in both directions.