RBA expected to cut rates for third time on July 8 as economy slows: Reuters poll
Financial markets and economists had previously forecast three RBA rate cuts this year but then in May raised their projections to four and now see five, a shift driven by inflation falling faster than expected and a weakening growth outlook.
A strong majority of economists, 31 of 37, predicted the RBA will cut its official cash rate (AUCBIR=ECI), opens new tab by 25 basis points to 3.60% at the end of its two-day meeting on July 8. Six expected no change, the survey showed.
"The May meeting was notably more dovish in the outlook and that's going to manifest in cutting in July. I suspect the RBA will keep the option open for further easing and that's why there will be a follow-up cut in August," said Philip O'Donaghoe, chief economist for Australia and New Zealand at Deutsche Bank.
"The post-COVID inflation surge is pretty much entirely out of the economy. And so the RBA's task now is to make sure we can get the growth that will keep the labour market strong...(so) the risk is we see more cuts."
Over 60% of respondents in the June 30-July 3 Reuters poll, 23 of 36, forecast another quarter-point cut this quarter, taking the cash rate to 3.35%.
While the median forecast pointed to a year-end cash rate of 3.10%, there was no clear consensus among economists on where the rate would end 2025: 16 of 33 projected 3.10%, 15 expected 3.35%, one each saw 3.60% and 2.85%.
Australia's major banks - ANZ, CBA, NAB and Westpac - were similarly split, underscoring the uncertainty around the final leg of the RBA's easing cycle.
The economy is forecast to grow 1.6% this year and 2.3% in 2026, a downgrade from 2.0% and 2.4% from the April poll, the poll predicted.
Official data showed the economy expanded just 0.2% in Q1 2025, a slowdown from 0.6% in Q4 2024.
"A large part of the reason why the RBA has now found itself on a rate-cutting path that's steeper than what it would have thought at the beginning of the year is because...consumption has been softer than the RBA anticipated," said Luci Ellis, chief economist at Westpac.
Some economists flagged the lack of a trade deal ahead of the July 9 expiry of a 90-day pause on U.S. President Donald Trump's sweeping tariffs on trading partners announced in April as a downside risk to the economy and RBA rates.
"If some of those global headwinds...feed through into more precautionary saving from households, then that could spur the RBA to deliver a little bit more support," said Taylor Nugent, senior economist at NAB.
Inflation, which cooled to 2.1% in May from 2.5% at the start of the year, was expected to average 2.6% in 2025 and 2.7% in 2026.
That is within the RBA's 2-3% target band but near the upper bound.
Despite deeper rate cut expectations, the Australian dollar has gained over 6% so far this year, lifted by broad U.S. dollar weakness, and was forecast to strengthen about 2% over the next six months, a separate Reuters poll found.
(Other stories from the July Reuters global economic poll)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
16 minutes ago
- The Independent
Three-quarters of small businesses will raise prices - yet nearly half are seeing profits shrink
A new survey among small and medium-sized businesses (SMEs) has found that a huge majority expect to be raising prices over the next year, with optimism split on whether they will survive or thrive amid challenging economic conditions. Business owners have been hit this year by raised National Insurance Contributions and a higher minimum wage, while a new pensions review could ultimately see them have to contribute more in the future as well. Meanwhile inflation from raw materials and higher energy costs have meant that their own prices have been on the increase, contributing to overall UK inflation levels. In addition, tariff uncertainty impacted those exporting to the US in the earlier part of the year before a trade deal was agreed. It all amounts to a difficult backdrop for companies this year, with SMEs typically harder-hit than larger businesses when consumer spending drops. Unsurprisingly, that means shoppers can expect to see another price hike coming in many places across the rest of 2025 and beyond, as detailed in a report by Simply Business, an insurance firm representing close to a million SMEs across the UK. A massive three-quarters (74 per cent) of more than 2,300 business owners surveyed said they'll need to raise prices in the coming year, an increase from the two-thirds who said so in 2024. More than three in five (63 per cent) businesses anticipate raising prices up to 20 per cent, but only 2 per cent expect prices to decrease in the coming 12 months. Despite those price increases, the businesses are not making more money. Nearly half (44 per cent) see profits decreasing in 2025, with fewer than two in five (17 per cent) expecting to see a rise in profits. Almost as many (16 per cent) say their profits will go down by more than a quarter. High street at stake An ongoing trend has been concerns about the long term future of the UK high street. Smaller businesses are increasingly despondent about its future, with a huge 82 per cent of SMEs saying their local high street has declined, 74 per cent saying shopper numbers are down and nearly two-thirds - 63 per cent - believing the notion of the national high street will be obsolete within ten years. As a result of this, more than a third of small business owners (37 per cent) are considering selling up or closing their doors this year for good. Government support is needed, the majority feel, to ensure a turnaround. Fewer 'chains' and more independent shops are seen as the best way to aid a reversal of fortunes, with free or cheap parking and more events of wider options of things to do also high on the list. The survey further revealed a quarter of small business owners expected to have to use their savings to prop up their business - yet despite these apparent hardships, more than half, 57 per cent, still feel optimism about their business' future. That is backed up by figures showing the number of new businesses registered in the first three months of this year was up almost 3 per cent compared to the same time last year.
The Sun
17 minutes ago
- The Sun
Shoppers spot rare new Cadbury's chocolate bar on UK shelves combining two sweet treat favourites
EXCITED snack fans are in a frenzy after spotting a brand new bar, combining two popular flavours. Cadbury is one of the nation's best loved confectioners and is often wowing treat lovers with its inventive new chocolate flavours, such as Caramel Mudcake and Biscoff. Exciting new flavour And shoppers have recently discovered that Cadbury Dairy Milk Honeycomb & Peanut is available in the UK. Sharing a snap of the scrumptious treat to the Newfoodsuk Instagram account one shoppers said: "New Honeycomb & Peanut Cadbury Dairy Milk Bar! "Wow, the peanuts work so well with the creamy Cadbury chocolate!" The tasty treat is an import from Australia, and is being sold by World Snacks UK. It features mouthwatering chocolate, blended together with honeycomb and peanut pieces. Shoppers can buy the imported 100g bar for £4.99 from the World Snacks website. The post was flooded with comments from Instagram users, eager to try out the snack for themselves. One person said: "Sounds like a great combination for a chocolate bar." A second person said: "This gonna slap." A third added: "Why can't they sell this in shops!" 'So excited' say Cadbury Ireland fans as new chocolate bar flavour to hit shelves TODAY More new Cadbury flavours This comes as shoppers are racing to pick up a giant Cadbury Dairy Milk chocolate bar on UK supermarket shelves - and are praising the "banging" flavour. The snack is a collaboration with iconic sweet treat giant Biscoff - and fans have rushed to fill their trolleys with the huge bar which they say is worth every penny. A Facebook user flagged the incredible find on the Extreme Couponing and Bargains UK group. And it was discovered in major supermarket Tesco - with the store offering a 10 per cent discount to certain customers. How to save money on chocolate We all love a bit of chocolate from now and then, but you don't have to break the bank buying your favourite bar. Consumer reporter Sam Walker reveals how to cut costs... Go own brand - if you're not too fussed about flavour and just want to supplant your chocolate cravings, you'll save by going for the supermarket's own brand bars. Shop around - if you've spotted your favourite variety at the supermarket, make sure you check if it's cheaper elsewhere. Websites like let you compare prices on products across all the major chains to see if you're getting the best deal. Look out for yellow stickers - supermarket staff put yellow, and sometimes orange and red, stickers on to products to show they've been reduced. They usually do this if the product is coming to the end of its best-before date or the packaging is slightly damaged. Buy bigger bars - most of the time, but not always, chocolate is cheaper per 100g the larger the bar. So if you've got the appetite, and you were going to buy a hefty amount of chocolate anyway, you might as well go bigger. The user posted a picture of the behemoth chocolate bar in their hand. They captioned the post: "New giant Biscoff Cadbury Dairy Milk Bar at Tesco." And the limited-edition Cadbury Dairy Milk Caramel Mudcake has been spotted in budget retailer B&M, and sweet-toothed Brits are racing to get a taste. One eagle-eyed shopper shared the find on Facebook, posting: 'Cadbury Caramel mudcake spotted at B&M.' Others were quick to respond, with one user writing: 'I must try it ASAP' and another adding: 'I hope it's still there when I go.' The Caramel Mudcake bar doesn't appear to be stocked anywhere else in the UK, making it one of the rarest Cadbury imports around at the moment.
Daily Mail
an hour ago
- Daily Mail
Aussies exposed in Louis Vuitton data leak as hackers gain access to passport details, home addresses and phone numbers
Louis Vuitton has suffered a major data breach with customers' personal information such as home addresses and passport numbers compromised. The French luxury brand was subject to a breach by an unauthorised third party on July 2 and, on Tuesday, it was confirmed Australian customers had been affected. Customers in South Korea, Turkey, the United Kingdom, Italy and Sweden had previously been revealed as being impacted. While on Monday it was revealed Hong Kong had also been hit with more than 419,000 customers affected. Louis Vuitton confirmed clients' first and last name, gender, country, phone number, email address, postal address and date of birth had been exposed in the breach, in a client email seen by Customers' purchases and preferences data, along with passport numbers were also exposed in the breach. The high-end luxury brand, best known for its infamous monogram handbags, told affected clients that no financial information had been stolen. 'Dear Client, We regret to inform you that an unauthorised third party temporarily accessed our system and obtained some of your information,' the email read. 'On July 2, 2025, we became aware of a personal data breach resulting from the exfiltration of certain personal data of some of our clients following an unauthorised access to our system. The fashion brand assured customers that 'cybersecurity teams have taken care of the incident with the utmost diligence and attention.' Louis Vuitton confirmed measures were taken immediately to 'contain the incident' and blocked the unauthorised third party from accessing further data. The high-end label also warned those who had provided their details to be wary of any suspicious communication. Clients should remain vigilant of any unsolicited emails, phone calls or text messages. Louis Vuitton has told its customers there is currently no evidence their data has been misused, but warned fraud attempts may occur in the future. The email warned clients from revealing their Louis Vuitton password to anyone and clarified the company 'will never ask you to disclose it'. Louis Vuitton falls under the banner of French conglomerate LVMH. The luxury brand is one of several companies in the conglomerate, which also includes high-end labels Dior and Tiffany & Co. Both Dior and Tiffany & Co have been subject to similar data breaches in recent months.
