The Reserve Bank of Australia (RBA) is expected to hold the official cash rate at 3.6% when its board meets tomorrow, with inflation pressures reducing the likelihood of further near-term easing.

Markets and all four of the nation’s major banks now forecast a September pause, marking the first unanimous call of 2025.

Analysts say a surprise uptick in August inflation to 3%, which was the fastest pace in more than a year, has shifted the conversation from “when” to “if” another cut arrives this year.

The RBA has already trimmed rates three times in 2025 as policymakers sought to balance falling price growth with a still-tight labour market.

Until recently, economists were confident of another reduction on Melbourne Cup Day in November. But Commonwealth Bank’s Belinda Allen warns that is “no longer a done deal”, with cuts now seen as only a 50-50 prospect.

NAB has gone further, pushing back its forecast for the next easing move to May 2026, citing “elevated uncertainty about the underlying pulse of inflation.”

In contrast, Westpac remains one of the most cautious on tightening, still projecting the cash rate could fall below 3% next year.

RBA Governor Michele Bullock will address the media following Tuesday’s announcement, with her remarks closely examined for clues on the bank’s future policy direction.

Analysts anticipate more cautious messaging, with the bank keen to stress its data-dependent approach as it weighs evidence of stronger consumer spending against moderating wages and signs of softer employment.

A prolonged pause would leave Australia’s policy path diverging from the US Federal Reserve, which has already begun cutting.

That could attract global capital inflows and lend support to the Aussie dollar, complicating the RBA’s effort to bring services inflation back under control.

For mortgage holders, relief is unlikely to come soon. While another cut this year remains possible, most experts agree households should brace for rates to stay higher for longer.

The RBA’s next board meeting is scheduled for 3–4 November.