Australian home borrowers are now being told they will have to wait until next year to get any interest rate relief.
The ANZ Bank now states that the Reserve Bank will ease rates in February 2025 instead of November this year as inflation rises again, despite the most aggressive pace of monetary policy tightening since the late 1980s.
The Reserve Bank is widely expected to leave the cash rate on hold at a 12-year high of 4.35 per cent on Tuesday.
But Australia is looking less likely to follow the European Central Bank in easing rates soon, meaning more cost of living pain for those with a mortgage for at least another few months.
Unlike most parts of the world, Australians are more likely to be paying off a variable rate mortgage, which means any rate cut would have an immediate effect.
ANZ broke ranks last week to push back its forecasted start date for rate cuts until February 2025
ANZ last week became the first major bank to forecast a delay in Australian rate cuts, after monthly inflation data showed the consumer price index growing by 3.6 per cent in the year to April, up from 3.5 per cent in the year to March.
This showed inflation moving further away from the RBA’s 2 to 3 per cent target, with the 30-day interbank futures market also not expecting any rate cuts until early 2025.
ANZ economist Adam Boyton, Catherine Birch, Blair Chapman and Madeline Dunk predicted the February rate cut would be followed by more relief in April and another cut by in the December quarter of 2025.
‘We now expect the first RBA cash rate cut of 25 basis points in February 2025 (from November 2024), with a follow-up easing most likely in April,’ they said.
‘The risks around our previous call of November had been skewed to a later start from some time.’
The Commonwealth Bank, Westpac and NAB are all still expecting the easing cycle to begin in November but that could change if price pressures fail to ease.
A 3.75 per cent increase in the national minimum wage and Labor’s revised stage three tax cuts are also coming into effect on July 1, which could add to inflationary pressures without necessarily sparking another rate rise.
RBA Governor Michele Bullock last month suggested the board would ‘look through’ the one-off effects on inflation but she also repeatedly suggested she would not ‘rule anything in or out’.
![RBA Governor Michele Bullock last month suggested the board would 'look through' the one-off effects on inflation but she also repeatedly suggested she would not 'rule anything in or out'](https://i0.wp.com/i.dailymail.co.uk/1s/2024/06/17/00/86197983-13536297-image-a-1_1718578929798.jpg?resize=634%2C423&ssl=1)
![RBA Governor Michele Bullock last month suggested the board would 'look through' the one-off effects on inflation but she also repeatedly suggested she would not 'rule anything in or out'](https://i0.wp.com/i.dailymail.co.uk/1s/2024/06/17/00/86197983-13536297-image-a-1_1718578929798.jpg?resize=634%2C423&ssl=1)
RBA Governor Michele Bullock last month suggested the board would ‘look through’ the one-off effects on inflation but she also repeatedly suggested she would not ‘rule anything in or out’
![](https://i0.wp.com/i.dailymail.co.uk/1s/2024/04/29/06/84206827-13360453-image-a-8_1714370089845.jpg?resize=634%2C383&ssl=1)
![](https://i0.wp.com/i.dailymail.co.uk/1s/2024/04/29/06/84206827-13360453-image-a-8_1714370089845.jpg?resize=634%2C383&ssl=1)
Australian borrowers are now paying 59 per cent more on their mortgage than they were three years ago – with financial markets now expecting even more rate rises in 2024