RBA makes July 2025 cash rate call
Economists predicted that the Reserve Bank of Australia would cut rates today. Find out here if the board has decided to raise, hold, or cut interest rates at its first meeting of the new financial year.
In its May meeting, the board of the Reserve Bank of Australia has decided to cut the cash rate by 0.25 per cent to 3.85 per cent, after holding it at 4.1 per cent in April.
Today (Tuesday 8 July), the RBA board decided to hold the cash rate at 3. 85 per cent. This comes after economists predicted a rate cut.
In a statement, the board said: "Uncertainty in the world economy remains elevated. While the final scope of US tariffs and policy responses in other countries remains unknown, financial market prices have rebounded with an expectation that the most extreme outcomes are likely to be avoided. Trade policy developments are nevertheless still expected to have an adverse effect on global economic activity, and there remains a risk that households and firms delay expenditure pending greater clarity on the outlook."
"Setting aside overseas developments, private domestic demand appears to have been recovering gradually, real household incomes have picked up and there has been an easing in some measures of financial stress. However, businesses in some sectors continue to report that weakness in demand makes it difficult to pass on cost increases to final prices," the board said.
Speaking to Accounting Times’ sister brand, Accountants Daily, about the RBA’s decision, Accounting Home Loans general manager Aylin Unsal said that the decision to hold the cash rate comes as a surprise and goes against market expectations.
However, she noted, the hold will provide continued stability for borrowers.
“Whilst today’s decision wasn’t what we hoped for, we do anticipate another rate cut to occur before the year ends,” she said.
“The current average interest rate range is now 5.1 per cent to 5.9 per cent. If you didn’t receive a rate reduction from the May cash rate cut, make sure to get in contact with your lender or broker as soon as possible.”
“If you're considering purchasing a property, now is a good time to get your pre-approval in place. Having pre-approval ready ensures you can move quickly when you find the right property,” Unsal continued.
“Accounting professionals can access certain market advantages, such as home loans with just a 10 per cent deposit and waived Lender's Mortgage Insurance. These benefits can make entering the property market more attainable and realistic for the cohort. It’s best to speak to a specialist broker for accountants, such as Accounting Home Loans, to find out what’s possible for you.”
