But it’s a two-day meeting, so we won’t hear about the decision until Tuesday afternoon.\u00a0<\/p>\n
We’re expecting an announcement at 2.30pm AEST on Tuesday, August 12<\/strong>.<\/p>\n Will there be a rate cut?<\/p>\n We can’t say for sure.<\/p>\n However, many people are banking on one<\/strong> after the Australian Bureau of Statistics (ABS) published the quarterly inflation figures at the end of July<\/a>.<\/p>\n Rate cut ‘seems a done deal’ amid falling inflation<\/a><\/p>\n The “trimmed mean” measure of inflation \u2014 the Reserve Bank’s preferred measure of underlying inflation \u2014 has also declined.<\/p>\n Those figures showed inflation was now well and truly within the RBA’s preferred range of between 2 and 3 per cent.<\/p>\n Within the inflation data, there were two main figures people were paying attention to:<\/p>\n The trimmed mean is also called “underlying inflation”.<\/p>\n The trimmed mean is the statistic the RBA had previously said it was focusing on to measure inflation<\/strong>, which meant a lot of people were watching for that figure in particular.<\/p>\n On the graph below, you can see headline inflation \u2014 the red line <\/strong>\u2014 has been within the RBA’s target range for longer than the trimmed mean.<\/p>\n Headline inflation reached that range in September last year.<\/p>\n But the trimmed mean \u2014 the blue line <\/strong>\u2014 only reached that range in March, when it hit 2.9 per cent.<\/p>\n What is the cash rate target?<\/p>\n Currently, the cash rate target is 3.85 per cent<\/strong>.<\/p>\n This figure is often referred to as “the interest rate” in conversation, but it’s not the rate people with mortgages pay.<\/p>\n “The cash rate is the interest rate that banks pay to borrow funds from other banks<\/strong> in the money market overnight,” the RBA’s website says<\/a>.<\/p>\n “It influences all other interest rates<\/strong>, including mortgage and deposit rates.”<\/p>\n That’s why, if you’re paying interest on a loan, your interest rate is probably higher than 3.85 per cent.<\/p>\n When the RBA changes the cash rate target, interest rates for mortgages don’t automatically change \u2014 the individual banks decide that.<\/p>\n Why didn’t the RBA cut rates last time?<\/p>\n The RBA said it was waiting on more data<\/strong>.<\/p>\n Many people expected the RBA to cut rates at the July meeting off the back of monthly inflation data from the ABS.<\/p>\n The RBA has repeatedly said it wants Australia’s inflation to get down to 2 to 3 per cent \u2014 and that monthly data was within that range.<\/p>\n However, that was monthly data, not quarterly data, which takes in three months at a time.<\/p>\n And it’s this quarterly data that’s regarded as Australia’s key inflation measure.<\/p>\n At the time of the July meeting, the most recent batch of quarterly data<\/a> had come out in April \u2014 and the RBA wanted to wait until the next drop of inflation figures at the end July<\/a>.<\/p>\n Now those figures are out.<\/p>\n And they look promising for people hoping for a rate cut.<\/p>\n We’ll find out what’s happening with rates on Tuesday afternoon. (ABC News: Dannielle Maguire)<\/p>\n When will interest rates go down?<\/p>\n No one can say for sure.<\/p>\n If the RBA does cut the cash rate target, that doesn’t mean mortgage interest rates will automatically go down.<\/p>\n It’ll be up to the banks to decide if they’ll pass that cut on to customers.<\/p>\n So if you have a mortgage, you’ll have to wait to hear from your lending institution<\/strong> about whether your rates are changing.<\/p>\n We typically hear from the major banks within a few hours of the RBA’s decision, though, so you probably won’t have to wait very long.<\/p>\n However, there is often a lag between banks announcing they’ll cut their interest rates and that cut taking effect.<\/p>\n They usually keep charging the higher rate for a week or two<\/strong> before the rate goes down \u2014 meaning it could be about a fortnight <\/strong>before people paying off a loan start to see any savings on their bills.<\/p>\n","protected":false},"excerpt":{"rendered":"The Reserve Bank of Australia (RBA) shocked many in the finance sector when it voted against cutting the…\n","protected":false},"author":2,"featured_media":332014,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,478,3716,33302,16921,16,15,119134,119133,119131,119137,119132,119135,119136],"class_list":{"0":"post-332013","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-interest-rates","11":"tag-rba","12":"tag-reserve-bank","13":"tag-reserve-bank-of-australia","14":"tag-uk","15":"tag-united-kingdom","16":"tag-what-is-the-rba","17":"tag-when-are-interest-rates-going-down","18":"tag-when-does-the-rba-meet-next","19":"tag-when-will-rates-be-cut","20":"tag-when-will-rates-do-down","21":"tag-why-didnt-the-rba-cut-rates","22":"tag-will-we-get-a-rate-cut"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115002059318224915","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/332013","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=332013"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/332013\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/332014"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=332013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=332013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=332013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
<\/p>\n