Monetary Policy Decision

Media Conference – 9 DECEMBER 2025

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

Inflation
Inflation has eased significantly since 2022 but has recently risen, with the Board viewing part of the increase as temporary while noting uncertainty around the new monthly CPI data; however, there are signs of a broader pick-up in inflation that may be partly persistent and requires close monitoring. In the September quarter, trimmed mean (underlying) inflation rose to 3.0 per cent annually and headline inflation climbed sharply to 3.2 per cent over the year.

Economic and Labour Market Conditions
Economic activity is recovering as private demand continues to strengthen, supported by readily available credit to both households and businesses. The effects of earlier interest rate reductions have yet to fully flow through to demand, prices and wages. Labour market conditions remain a little tight, despite a gradual rise in the unemployment rate and slower employment growth. Uncertainty persists regarding the outlook for inflation and domestic economic activity. Global economic uncertainty remains elevated, but so far it has had minimal impact on growth and trade among Australia’s major trading partners.

Monetary Policy Stance
Recent inflation data suggest that risks to inflation have tilted to the upside. 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.