RBA Interest Rates Cuts: Updates & Changes

On November 4 2025, the Reserve Bank of Australia (RBA) announced that interest rates will remain on hold at 3.6%. While borrowers may have hoped for rate relief, recent inflation data and global uncertainty have led the RBA to maintain its stance for now.

In this article, we’ll break down the latest developments on RBA interest rates, explore what they mean for Australian small and medium businesses, and discuss how you can plan ahead. We’ll also look at what economists and markets are predicting for future interest rate cuts.

Key Takeaways

• The RBA is keeping the cash rate on hold at 3.6%, taking a cautious approach amid ongoing inflation and global uncertainty.
• An interest rate cut in the future will depend on sustained evidence that inflation is easing across goods and services.
• For small and medium businesses, higher borrowing costs and slower growth mean tighter cash flow management is essential.
• Economists now expect only one small rate cut next year, with some predicting no change until 2027.

What are the changes to Australia’s interest rates?

At its latest meeting, the RBA decided to keep the cash rate on hold at 3.6%, choosing to take a cautious approach amid ongoing inflation concerns. This follows three earlier rate cuts in 2025, but with inflation still running higher than expected, the RBA has opted to pause any further reductions for now.

Here’s a breakdown of the recent interest rate changes in Australia​:

• Current cash rate: 3.6%, unchanged from the previous meeting.
• Reason for the pause: Inflation remains above the RBA’s 2–3% target range, driven by rising costs in housing, insurance, health care, and education.
• Economic backdrop: While inflation has eased since 2022, recent data showed a pickup in the September quarter, prompting the RBA to hold steady.
• Global influence: Central banks in the US, UK, and Europe are also taking a cautious stance, reinforcing the RBA’s measured approach.

This means any future rate cuts will depend on clear evidence that inflation is easing—something the RBA has yet to see.

How often do interest rates change in Australia?

The RBA board meets 11 times a year, typically on the first Tuesday of each month (except January), to review and adjust interest rates as needed. Changes depend on key economic indicators such as inflation, employment, GDP growth, and consumer spending.

While the rate may stay unchanged for several consecutive months, shifts can happen when the RBA believes monetary policy needs to tighten or loosen to meet its inflation and economic growth targets.

What do these changes mean for Australia’s small and medium businesses?

For small and medium businesses, the RBA’s decision to hold the cash rate steady means the cost of borrowing remains high, and relief may still be some time away. While a future RBA interest rate cut would help to ease pressure, the current pause reflects ongoing concerns about inflation and wage growth.

Here’s how this affects key areas of business:

• Loans and financing: With the cash rate unchanged, loan repayments and credit costs remain elevated, making it essential for businesses to review budgets and negotiate better lending terms where possible.
• Cash flow management: Businesses will need to stay focused on cash flow management, keeping close track of income and expenses to maintain stability amid slower growth and higher operating costs.
• Hiring and job growth: While the labour market remains tight, higher borrowing costs could slow down recruitment and investment in new roles.
• Spending and investment: Many businesses are delaying expansion or major purchases until clearer signs of a rate cut emerge.

How businesses can plan ahead and prepare

With interest rates expected to remain steady for the foreseeable future, now is the time for businesses to strengthen their financial management practices and plan for possible shifts in monetary policy.

Here are a few ways to stay prepared:

• Review budgets regularly: Assess how rate changes could affect your loan repayments, supplier costs, and profit margins.
• Build financial buffers: Maintain healthy cash reserves to manage higher borrowing costs or slower customer payments.
• Refine forecasting: Use data-driven insights to anticipate cash flow fluctuations, especially as the end of financial year approaches.
• Explore efficiency tools: Accounting software like Intuit QuickBooks can help automate tracking, manage expenses, and keep finances organised for small and mid-sized businesses.

Future predictions of RBA interest rate cuts

Banks and markets now expect a prolonged pause rather than swift easing. Earlier hopes for multiple rate cuts have faded: current market forecasts suggest the cash rate could fall to around 3.3% next year (which would mean just one small cut of about a quarter of a percentage point). Most economists expect no further reductions through the end of next year—while some forecasters even see the next reduction happening as late as 2027.

Why cuts may be limited:

• Inflation has recently picked up and remains near or above the top of the RBA’s 2–3% band, with the trimmed mean still elevated.
• Wages aren’t accelerating enough to outpace prices, and the RBA wants sustained evidence of disinflation before easing.
• Growth and jobs are holding up better than expected, reducing urgency to cut.

What could change the outlook:

• Clear, sustained falls in inflation across goods and services.
• A meaningful cooling in the labour market or weaker demand.

What this means for businesses:

• Don’t bank on quick RBA rate-cut savings. Plan for higher borrowing costs to persist.
• Tighten cash flow management, stress-test budgets for flat-to-higher rates, and time investments cautiously.
• Monitor spreads: recent competition has lowered mortgage/loan spreads, but these could widen again, lifting effective borrowing costs even without a cash-rate move.

Final thoughts for growing businesses 

Australia’s latest rate decision shows the RBA’s cautious approach is far from over. With inflation still stubborn and economic growth steady, future rate cuts may be limited. For small and medium businesses, this means continuing to operate in a higher-cost environment, where planning and financial discipline are key to resilience.

Now is the time to take control of your finances. Tools like Intuit QuickBooks make it easier to track expenses, manage receipts, and maintain visibility over your cash flow. By staying organised and informed, you’ll be ready to navigate changing market conditions with confidence.