Interest rate cuts 

ABS head of prices statistics Michelle Marquardt confirmed inflation is at its lower annual rate since the March 2021 quarter. Picture: Australian Bureau of Statistics

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Cost-of-living crisis?

REA Group senior economist Eleanor Creagh says the Reserve Bank will hold off on interest rate cuts this year. Picture: Supplied

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Economic outlook

Ms Creagh said it was clear the RBA was of the view that the level of demand in Australia is too high relative to supply.

“Market services inflation remains above average levels, reflecting still too strong domestic inflationary pressures, another focus for the RBA given its persistence,” she said.

“The September quarter CPI reflects that although restrictive monetary policy continues to bring demand and supply more into balance, there is further to go. As a result, we expect conditions for a cut will not arise before the years end.”

Consumer spending will be “pivotal” heading towards Christmas for what the RBA decides to do next, RSM Australia economist Devika Shivadekar said.

"Upcoming retail events like Black Friday, Cyber Monday, and the holiday season presenting prime opportunities for elevated spending towards the end of the year.

"Whether the combined effects of easing inflation, government subsidies and tax cuts, and the holiday spending season will drive demand to a level that prompts the central bank to delay its rate cut remains to be seen.”