Borrowers hoping for more cuts next year may need to adjust expectations after a run of higher-than-expected inflation.
The Reserve Bank of Australia (RBA) kept the cash rate at 3.60% in December, but inflation has climbed to 3.8% after four consecutive monthly increases. If inflation remains above the 2-3% target band in 2026, the RBA is unlikely to cut rates – and some economists warn the next move could even be up.
What the RBA is signalling
Speaking after the decision, RBA governor Michele Bullock said: “I don't think there are interest rate cuts on the horizon for the foreseeable future.”
In plain terms: rate cuts aren’t imminent, and borrowers shouldn’t rely on them to rescue cash flow in 2026.
Economist Warren Hogan went further, calling on the RBA to start hiking rates from the first quarter of 2026.
How this affects your loan in 2026
If you’d like clarity on how the rate outlook affects you, We can review your loan and show you your options for the year ahead.
