The RBA left the cash rate unchanged at 3.85% in July 2025, as a majority of Board members opted to wait for further confirmation that inflation is sustainably returning to target.

• Underlying inflation is still expected to ease but remain in the upper half of the 2–3% range; headline inflation may rise temporarily in late 2025 as energy subsidies unwind.
• Financial conditions have eased after earlier cuts in February and May, and market pricing anticipates two more cuts by year-end.
• Household credit growth remains subdued; saving ratios are elevated and housing credit demand is still weak despite lower rates.
• Labour market conditions remain tight, with unemployment steady and job vacancies still high, though wage growth and job mobility have slowed.
• Global risks persist, including uncertain US trade policy, high fiscal deficits, and weak demand in China, but worst-case scenarios have become less likely.
• Members judged policy as still modestly restrictive, but easing financial conditions warranted a reassessment of timing for further cuts.
• The majority chose to hold in July, citing slightly stronger-than-expected data and preferring to wait for confirmation that inflation is on track to sustainably return to 2.5%.
• The minority favored an immediate cut, pointing to subdued GDP growth, weaker wage and services inflation, and rising downside risks to global growth.
• Members acknowledged that estimating the neutral rate and the degree of restrictiveness remains uncertain, advocating for a cautious and gradual approach.
• The Board agreed to begin publishing vote counts to improve transparency and emphasized a continued data-dependent strategy going forward.