Economists predict the Reserve Bank of Australia will maintain its cash rate at 3.60% due to a tight labor market and ongoing inflation concerns. Despite expectations for a rate cut by year-end, recent data suggests the RBA may delay further easing measures.

In August, Australia’s consumer price index rose to 3.0% from a year earlier, up from 2.8% in July. This acceleration in inflation comes after multiple rate cuts earlier this year, with economic growth showing signs of improvement and the jobless rate stabilizing.

All 39 economists in a recent Reuters poll anticipate the RBA will keep its official cash rate steady at 3.60% following its upcoming policy meeting on September 30. With unemployment rates rising slightly but labor market conditions remaining tight, the RBA is expected to take a cautious approach.

Despite expectations for a rate cut by several major banks in November, recent data showing signs of economic improvement and inflationary pressures may lead the RBA to hold off on further easing measures. Analysts highlight the need for caution in light of ongoing uncertainties.

While some economists anticipate one more rate cut in the first quarter of 2026, others believe the RBA may maintain rates at 3.35% or even 3.60%. The decision will likely hinge on a variety of factors, including inflation data and the strength of the labor market.

ANZ economist Madeline Dunk suggests that if inflation continues to rise and the labor market remains robust, the RBA may opt to avoid a rate cut in November. With momentum building in the economy, the impact of previous rate cuts may still be unfolding, prompting questions about the necessity of further easing measures.

Read more at Yahoo Finance: RBA to hold rates on September 30 but cut likely after Q3 inflation: Reuters poll