RBA August 2024 Cash Rate Predictions

The Consumer Price Index (CPI) rose by 1% in the June quarter, pushing the annual inflation rate to 3.8%.

According to ABS data, the most significant price increases were seen in:

• Housing (+1.1%)
• Food and non-alcoholic beverages (+1.2%)
• Clothing and footwear (+3.1%)
• Alcohol and tobacco (+1.5%)

As the RBA prepares its cash rate decision for 6 August 2024, using CPI data to assess inflation trends, we asked our experts for their predictions.

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Cash Rate Prediction for August 2024

Home Loan Experts CEO Alan Hemmings shared his thoughts: “The RBA might hold the cash rate in August 2024. They face a tough situation. The primary driver of inflation was housing costs, and increasing rates could further exacerbate these costs. When considering trimmed mean inflation, which excludes the most extreme changes, inflation settled at 3.8%. Many economists predicted this outcome would likely lead the RBA to hold the rate.”

Senior Mortgage Broker Jonathan Preston agreed, describing the situation as “dovish” – indicating he also expects the RBA to maintain the current rate. He noted, “The headline number was below 4.0%.”

Hemmings added that if the RBA decides to increase rates, it would likely be a modest 25-basis-point hike. However, he believes they may wait another month to better understand the ongoing trends.

The RBA will give its cash rate decision on 6 August 2024.

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With the rising CPI and inflation affecting housing costs, an expert mortgage broker can help you secure finance for your dream home. Call us on 1300 889 743 or enquire online today.