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Macroeconomics

RBA Cash Rate Reported at 4.85% as Consumer and Business Confidence Slide

Reports this week point to a 4.85% cash rate, weaker Westpac and NAB confidence readings and ongoing housing market adjustment, while employment remains firm.

Published 13 November 2026

Australian Macroeconomic Report (5 November – 12 November 2026)

This week's coverage focused on the economic strain following the latest rate rise, falling consumer and business confidence, and adjustment in the housing market. Figures are cited with their sources as they appeared in the headlines provided; no detailed figures beyond those headlines have been included.

1. RBA Cash Rate and Monetary Policy

  • CoStar reported this week that "the RBA has lifted the cash rate to 4.85%", adding that pressure on commercial property is growing.
  • Switzer Daily noted that Australia has raised rates faster and harder this year than any other major advanced economy.
  • The Nightly reported that the RBA Governor acknowledged the Australian economy "feels like it's in a recession".
  • ANZ said expectations of further RBA hikes have cooled somewhat, but core inflation of around 3.7% is likely to keep the RBA cautious (as cited by investingLive).
  • UBS forecast no RBA rate cuts before the second half of 2027, with an AI investment boom adding to inflation while growth slows to 1.4% (as cited by investingLive).
  • FOREX.com observed that falling consumer and business confidence readings are strengthening the case for an RBA pause.

The burden of higher rates is weighing on households, but cooling expectations of further hikes and talk of a pause suggest policy may be nearing its peak.

2. Interest Rate Outlook

Official forecasts from the major banks and Morgan Stanley were not included in this week's data. Based on news coverage, ANZ pointed to a cautious RBA, while UBS expects no cuts until late 2027. Australian Conveyancer also reported that one major bank has said "enough rate rises" have now been delivered.

3. Consumer Confidence (Westpac-MI)

  • Investing.com, investingLive and others reported that a Westpac survey showed consumer sentiment falling to its lowest level in four years, with interest rates and cost-of-living pressures cited as the drivers.
  • Action Forex reported that pessimism among mortgage holders is at a record level, while The Guardian reported that mortgage holder confidence has fallen to its lowest since 1994.

Sentiment has contracted sharply, though the weakness is also being read as easing the pressure on the RBA to tighten further.

4. Business Confidence (NAB Business Survey)

  • According to Action Forex, the NAB business confidence index fell to -15, with weaker demand and rising costs squeezing profitability.
  • BigGo Finance reported that business conditions have dropped to a six-year low, and Kalkine reported that forward orders fell 11 points.

However, as FOREX.com has interpreted it, the weaker readings are strengthening the argument for holding rates steady, which some see as a possible first step towards easing the rate burden.

5. Unemployment and Employment (ABS)

  • Kalkine assessed the latest employment data as having "held up solidly, as expected".
  • CommBank reported that monthly wage growth slowed to its weakest pace so far this year.

A relatively resilient labour market provides a buffer for household incomes, but slowing wage growth remains a variable for the cost-of-living squeeze.

6. SQM Research Insights

Real Estate reported that an SQM analyst warned "no major city has hit bottom yet". Another article from the same publication also discussed when the decline in house prices may stop. Detailed SQM figures such as rental vacancy rates and asking rents were not included in this week's data.

7. Australian Politics and Property Impacts

No dedicated political news data was provided, but the following housing policy items were reported.

  • Australian Conveyancer reported that investors are leaving the housing market because of tax changes, while API Magazine reported that the scale of investor exits is at a record level. Investors holding rental properties may wish to check how the tax changes affect them.
  • SBS reported that a parliamentary inquiry heard that falling house prices have not translated into improved housing affordability, and that questions were also raised about bank profitability.

8. Overall Takeaways

This week's data shows that high interest rates and weak confidence readings continue to add to borrowing pressure and housing market adjustment (Westpac, NAB and others). Homeowners with variable rate loans may wish to review their repayment burden. On the other hand, employment is holding up and expectations of further rate rises are cooling, which leaves some room for policy pressure to ease, and a period of price adjustment may also prompt a reassessment of market conditions over the longer term.

This article is general information only and does not constitute investment or financial advice.

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