RBA On The Brink: Rate Cut Speculation Heats Up

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.

The survey, conducted as part of the Finder RBA Cash Rate Survey, reveals that 73% of economists and market specialists foresee a 25-basis point rate cut at next week's meeting. This adjustment could lower the policy rate from 4.35% to 4.10%, marking the first decrease in five years, according to findings initially reported by Patrick Buncsi at Financial Services Online.

While most forecast the cut for February, a subset of experts opts for alternative timelines. Five survey participants predict an April reduction, whereas two others anticipate a rate cut happening by May. Divergent opinions highlight the complexity of the economic landscape and the challenges faced by policymakers.

Shane Oliver, chief economist at AMP Capital, is among those expecting the RBA to act decisively. "Underlying inflation is falling faster than the RBA expected and has been running around target over the last six months, economic activity is a bit weaker than expected and Trump’s trade war poses more risks to Australian growth than inflation," Oliver remarked, pointing to international tensions adding weight to the decision.

The prospect of a rate cut is driven not only by global factors but also by domestic concerns, including election year dynamics and noteworthy dips in monthly inflation figures. Critics argue that the combination of weak growth and international trade volatility necessitates a proactive approach from the RBA.

Despite the apparent urgency, some economists urge caution. QUT Adjunct Professor Noel Whittaker is sceptical of a prompt cut, citing persistent inflation within the building sector, severe labour shortages, and robust employment figures. "The problem is inflation in the building industry remains massive, labour shortages are severe, and the job market is still strong - keeping inflationary pressure on the economy," Whittaker notes.

Other analysts mirror Whittaker's concerns, pointing towards stubborn core inflation rates and price pressures within specific sectors. Sean Langcake of Oxford Economics Australia warns that the February decision is closely contested. He elaborates, "The February decision will be a very close run. Inflation in Q4 was a little weaker than the RBA expected."

Langcake expressed the ongoing deliberation, cautioning that despite weaker inflation indicators, "Services inflation is still looking very strong - a byproduct of the labour market still operating beyond its capacity." He suggests the RBA might delay action to observe labour market developments over the coming months.

The cash rate has remained steady since November 2023, maintaining a level of 4.35%. Nevertheless, as economic tides shift, the RBA faces critical decisions that could reshape the financial landscape for Australian consumers and businesses alike.

Published:Monday, 17th Feb 2025
Author: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Clear

Liberty Financial's Expansion in SME and SMSF Lending Markets

22 Mar 2026: Paige Estritori

Liberty Financial Group has reported significant growth in its lending to small and medium-sized enterprises (SMEs) and self-managed super funds (SMSFs) in its half-year results ending December 31, 2025. The company's net profits after tax rose to $76.4 million, up from $67.7 million in the previous six months, driven by increased lending in these sectors. - read more

Rate Money's Competitive Edge: Lower Rates for Self-Employed Borrowers

22 Mar 2026: Paige Estritori

Rate Money, a non-bank lender specializing in loans for self-employed individuals, has announced significant reductions in interest rates across its 'Evolve Easy Doc' range. Effective June 30, 2025, new rates start from 6.64% per annum, with the 'Easy Doc One Year' product now beginning at 6.09% per annum. - read more

NAB Continues to Dominate Australia's Expanding Business Lending Market

06 Mar 2026: Paige Estritori

In January 2026, Australia's business lending landscape reached a significant milestone, with authorised deposit-taking institutions (ADIs) reporting a combined total of $1.2 trillion in loans to non-financial businesses. This marks a 9.3% increase over the previous year and a substantial 53.9% growth since January 2020. Among the major players, National Australia Bank (NAB) continues to lead, boasting a loan book of $261.1 billion, reflecting an 11.6% year-on-year growth. - read more

Westpac's Bold Move to Reinforce Its Business Lending Focus

06 Mar 2026: Paige Estritori

In a strategic effort to bolster its presence in the business lending sector, Westpac Banking Corporation has announced a significant restructuring of its operations. The bank plans to replace a substantial number of in-branch tellers with business bankers, aiming to enhance support for small and medium-sized enterprises (SMEs) across Australia. - read more

Renown Lending's Nationwide Expansion to Support Australian SMEs

06 Mar 2026: Paige Estritori

In response to the escalating demand for small and medium-sized enterprise (SME) financing, Renown Lending has announced an expansion of its funding pool from $250 million to $400 million. This substantial increase is designed to provide fast and flexible funding solutions to SMEs across all Australian states. - read more

NAB's Business Lending Surges by 7% Annually

26 Feb 2026: Paige Estritori

National Australia Bank (NAB) has reported a significant 7% year-on-year growth in its business lending portfolio, bringing the total to $336.2 billion. This growth underscores NAB's commitment to supporting small and medium-sized enterprises (SMEs) across Australia. - read more

CBA's Business Lending Hits $168 Billion Mark

26 Feb 2026: Paige Estritori

The Commonwealth Bank of Australia (CBA) has announced a substantial 12% increase in its business lending portfolio, reaching $168 billion in the first half of 2026. This growth rate exceeds the bank's compound annual growth rate of 10.7%, indicating a strong performance in the business lending sector. - read more

Click for more Finance News