What to expect from the RBA meeting in September 2025

The Reserve Bank of Australia (RBA) will hold its next meeting on 30 September 2025, to decide whether to change the cash rate, which currently sits at 3.60%. After three rate cuts earlier this year, many economists expect the central bank to pause again this month as it weighs up inflation, jobs, and growth.

With the economy slowing and inflation settling within the RBA’s target band, attention is shifting to when the next cut will come—with many economists predicting another in November.

Inflation is easing, but we’re not out of the woods

Headline inflation lifted slightly to 2.8% in July, mainly due to the winding back of electricity rebates, while the RBA’s preferred “trimmed mean” measure sits at 2.7%. The latest CPI data, released on September 24 shows that it’s risen to an annual rate of 3.0% in August—the highest level since July 2024.

Inflation may be broadly back within the RBA’s target band, however, these latest CPI results will suggest that the central bank will want to see consistent evidence that price growth is sustained before making another move. In other words, they want to be sure that these recent price rises are temporary, not a sign of a rebound in broader inflation.

RBA Governor Michele Bullock noted in her opening statement to the Parliament Economics Committee in Canberra on Monday that:

“We’ve made real progress in bringing inflation down. But our job is to make sure it stays within the target range in a way that’s sustainable – not just for now, but for the long term. We know that high inflation has pushed prices up across the board over the past few years… [while] inflation has fallen materially, the price level isn’t coming back down.

The higher price level has affected everyone—whether you’re paying a mortgage, renting, running a business, or just trying to make ends meet. It’s been especially tough on people with lower incomes and those in more vulnerable situations. This is why, as I’ve said, it’s so important that inflation remains low and stable.”

Labour market is cooling but still tight

Unemployment has edged up to 4.2% in August 2025 (ABS Labour Force Survey), suggesting the jobs market is softening. Full-time roles have fallen slightly, partly offset by an increase in part-time positions, highlighting a shift in the type of work available.

The RBA noted in its August 2025 Statement on Monetary Policy that forecasts remain uncertain: global conditions are unpredictable, domestic growth could slow or surge, and the labour market might stay tighter than expected. At the same time, weak productivity growth and elevated labour costs continue to be a concern.

RBA Governor Michele Bullock has indicated that while the labour market has softened a little, there is still some tightness in the system. In other words, there’s no immediate pressure for a rate cut, but if unemployment rises further in the coming months, the case for easing will strengthen.

Growth outlook is weaker than expected

Australia’s economy is slowing, with Commonwealth Bank now tipping GDP growth of just 1.7% for 2025—down from earlier forecasts of around 2.1%.

Household spending remains modest, with ABS figures showing a modest 0.5% monthly rise in July 2025 and 5.1% growth year-on-year, reflecting the squeeze from higher borrowing costs and ever-rising living expenses. The RBA’s August 2025 Statement on Monetary Policy noted that higher interest rates have slowed demand across the economy and revised down GDP forecasts, expecting growth to stay below trend for some time.

At the same time, the RBA flagged that while global growth risks have eased slightly, uncertainty around trade and major trading partners continues to weigh on the outlook. Private demand, however, has shown small signs of recovery, with the RBA expecting it to become the main driver of growth as public demand tapers off. This weaker growth backdrop, combined with lingering global risks, strengthens the case for another cut before the year is out.

RBA language shows caution

The RBA cut the cash rate last meeting to give the slowing economy a boost, keep inflation on track, and ensure the jobs market softens without tipping into trouble. In other words, growth was slowing, inflation was volatile, and full-time jobs were slipping—a small cut helped balance all three without overcorrecting.

In her most recent comments, Michele Bullock said:

“Since the August meeting, domestic data have been broadly in line with our expectations, if not slightly stronger… but the economic outlook continues to be clouded by uncertainty.”

A growing concern for the RBA is that the global economy remains highly uncertain. Domestically, growth could easily either stall or accelerate, and the labour market may remain tighter than expected. As RBA Governor Michele Bullock explained, the Bank is mindful that “productivity growth has not picked up and growth in unit labour costs remains high,”; factors that will certainly influence its future decision-making, and suggests the Board is not in a rush to cut again—at least not in September.

What the Big Four Banks are predicting

Commonwealth Bank (CBA)

CBA expects the RBA to hold steady in September and deliver the next cut in November, bringing the cash rate down to around 3.35% by the end of 2025.

CBA economist Harry Ottley described the latest jobs numbers as a “mixed bag,” but said the unemployment rate was “broadly tracking as the RBA had expected.” This suggests the Bank sees no immediate trigger for change in September, but still leans toward easing before year-end.

National Australia Bank (NAB)

NAB also expects no move in September, and while they agree another cut is coming, they don’t see urgency. So much so, that their economists don’t foresee any further cuts to the cash rate until May 2026. Reflecting on the latest CPI data in their Economy Watch release, “the detail shows that market services inflation is significantly hotter than we expected.” This highlights NAB’s cautious stance off the back of the latest CPI data, suggesting that the RBA will wait to see if inflation remains under control before backing additional cuts.

Westpac

Westpac’s economists also expect the RBA to hold the cash rate in September with a potential move in November, suggesting that the central bank won’t be swayed by one month of stronger-than-expected figures. Ryan Well, Westpac economist, said, “This is unlikely to shift the calculus materially for the RBA, which prefers to take a multi-month view on current trends given the volatility in the monthly data.”

ANZ

ANZ is also in the “hold in September, cut in November” camp. Aaron Luuk, ANZ economist, explained: “The data would not sway the market one way or another on the November RBA meeting, where a rate cut is expected, or for that matter the coming September meeting, which should pass with no change in rates.”

For now, it’s general consensus that the RBA is likely to sit tight in September and reassess in November, when the next round of inflation and jobs data will be on the table.