The Reserve Bank has decided to maintain interest rates at 3.6 percent, a move that was anticipated by many analysts. This decision comes after recent data revealed a significant increase in inflation during the September quarter, which exceeded the bank's expectations.

The Reserve Bank's Board has one more meeting scheduled for December 8-9 this year. Economists believe the chances of a rate cut during that meeting are extremely low. Some experts suggest that the next adjustment to interest rates could be an increase, depending on economic performance in the upcoming months.

Recent figures indicated that inflation rose sharply in the September quarter, with consumer prices climbing at an annual rate of 3.2 percent, up from 2.1 percent in the June quarter. Ben Udy, the lead economist for Oxford Economics Australia, noted that this inflation spike effectively eliminated any remaining hopes for a rate cut in November. However, he reassured that there is no need for alarm regarding the inflation increase.

Udy explained that inflationary pressures are expected to ease over the next year. He stated, "As the impact of the unwind in electricity rebates fades, wage growth continues to cool, and global trade disruption increases the flow of cheaper imports into Australia, we expect inflation to ease meaningfully over the year ahead."

He also mentioned that the labor market is likely to continue deteriorating, which could prompt the Reserve Bank to lower rates toward a neutral level. Udy projected, "We've penciled in two rate cuts in the first half of 2026." This outlook suggests that while the current inflation rate is concerning, there may be a path toward stabilization in the future.