Australia Interest Rate

Inflation in Australia appeared stronger than expected in Q3 2025, while weak productivity has lowered the economy’s potential growth rate, RBA Assistant Governor Sarah Hunter said in a speech. She noted that while recent data had been slightly firmer overall, employment was somewhat softer. With consumer demand recovering and inflation still sticky in some sectors, the board chose to keep rates at 3.65% in September. “Looking forward, we will monitor outcomes and continually reassess our view on the outlook for the economy, and the board will adjust policy as appropriate as new information comes to hand,” Hunter said. Her speech also pointed to a long-run productivity slowdown, linked to reduced competition and slower technology adoption, which has lowered the economy’s “speed limit” to around 2% and signaled a slower pace for wage growth to stay consistent with the RBA’s 2.5% inflation target.