ANZ has retracted its forecast for a final interest rate cut by the Reserve Bank of Australia (RBA), citing persistent inflationary pressures. The shift in ANZ’s outlook comes after evaluating recent economic data, including the trimmed mean inflation figures for the third quarter. ANZ’s head of Australian economics, Adam Boyton, stated that while the increase in trimmed mean inflation may be temporary, other factors suggest the RBA will likely maintain a cautious stance on further easing.
Boyton pointed to the new monthly Consumer Price Index (CPI), solid Gross Domestic Product (GDP) growth, and the RBA’s assessment of a tight labour market as key indicators influencing the decision. These factors, he noted, outweigh the possibility of further monetary easing. However, ANZ also acknowledges conflicting signals in leading demand indicators and a rise in the unemployment rate, making a case for a rate hike in 2026 unlikely.
Previously, ANZ anticipated the RBA would implement a rate cut in the first half of 2026. Now, the bank projects the cash rate will remain stable at 3.6 per cent for an extended duration. This revised outlook reflects ANZ’s assessment of the current economic landscape and the anticipated policy response from the Reserve Bank. The RBA is Australia’s central bank, responsible for maintaining price stability and full employment through monetary policy.
ANZ is one of Australia’s largest banks, providing a range of financial products and services to retail, commercial, and institutional clients. Its economic forecasts are closely watched by investors and policymakers for insights into the Australian economy’s trajectory.
