Statement by the Monetary Policy Board: Monetary Policy Decision | Media Releases | RBA
Central bank: rba | Type: statement | Date: 2025-09-30

Media Release
Statement by the Monetary Policy Board: Monetary Policy Decision
30 September 2025
At its meeting today, the Board decided to leave the cash rate unchanged at 3.60 per cent.
The decline in underlying inflation has slowed.
Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to
bring aggregate demand and potential supply closer towards balance. Both headline and trimmed mean
inflation were within the
2–3 per cent
range in the June quarter. Recent data, while partial
and volatile, suggest that inflation in the September quarter may be higher than expected at the time of
the August
Statement on Monetary Policy
Domestic economic activity is recovering but the outlook remains uncertain.
Data for the June quarter show that private demand is recovering a little more rapidly than expected,
taking over from public demand as the driver of growth. In particular, private consumption is picking up
as real household incomes rise and measures of financial conditions ease. The housing market is
strengthening, a sign that recent interest rate decreases are having an effect. Credit is readily
available to both households and businesses.
Various indicators suggest that labour market conditions have been broadly steady in recent months and
remain a little tight. Growth in employment has slowed by slightly more than expected, but the
unemployment rate was unchanged at 4.2 per cent in August. Measures of labour underutilisation
remain at low rates and business surveys and liaison suggest that availability of labour has been little
changed of late. Looking through quarterly volatility, wages growth has eased from its peak, but
productivity growth has been weak and growth in unit labour costs remains high.
There are uncertainties about the outlook for domestic economic activity and inflation stemming from both
domestic and international developments. On the domestic side, stronger-than-expected data on growth and
inflation may indicate that households have become more comfortable consuming as real incomes and wealth
rise. If this continues, it may make it easier for businesses to pass on cost increases and lead to more
demand for labour. Alternatively, the recent growth in consumption might not persist, particularly if
households become more concerned about overseas developments.
Uncertainty in the global economy remains elevated. There is a little more clarity on the scope and scale
of US tariffs and policy responses in other countries, suggesting that more extreme outcomes are likely
to be avoided. Trade policy developments are nevertheless still expected to have an adverse effect on
global economic growth over time. Beyond tariffs, a broader range of geopolitical risks remain a threat
to the global economy. This could all weigh on growth in aggregate demand and lead to weaker labour
market conditions in the domestic economy.
There are also uncertainties regarding the lags in the effect of recent monetary policy easing, the
balance between aggregate demand and potential supply for goods and services, conditions in the labour
market and the outlook for productivity.
Maintaining price stability and full employment is the priority.
With signs that private demand is recovering, indications that inflation may be persistent in some areas
and labour market conditions overall remaining stable, the Board decided that it was appropriate to
maintain the cash rate at its current level at this meeting. Financial conditions have eased since the
beginning of the year and this seems to be having some impact, but it will take some time to see the full
effects of earlier cash rate reductions. The Board judged that it was appropriate to remain cautious,
updating its view of the outlook as the data evolve. The Board remains alert to the heightened level of
uncertainty about the outlook. It noted that monetary policy is well placed to respond decisively to
international developments if they were to have material implications for activity and inflation in
Australia.
The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its
decisions. In doing so, it will pay close attention to developments in the global economy and financial
markets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is
focused on its mandate to deliver price stability and full employment and will do what it considers
necessary to achieve that outcome.
Today’s policy decision was unanimous.
More on the September 2025 monetary policy decision...
Media Conference
Governor Michele Bullock addresses the media after the monetary policy decision.
Media Conference
Monetary Policy Minutes
Minutes of the Reserve Bank Board meeting, published two weeks after the decision.
Monetary Policy Minutes