At its meeting today, the Board decided to leaveincrease the cash rate unchangedtarget atby 25 basis points to 3.6085 per cent.
While inflation has fallen substantially since its peak in 2022, it has picked up more recently. The Board’s judgement is that some of the recent increase in underlying inflation was due to temporary factors and there is uncertainty about how much signal to take from the monthly CPI data given it is a new data series. Nevertheless, the data do suggest some signs of a more broadly based pick-up in inflation, part of which may be persistent and will bear close monitoring.While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025. The Board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures. As a result, the Board considers that inflation is likely to remain above target for some time.
EconomicCapacity activitypressures continuesreflect, toin recoverpart, the greater momentum in demand seen in recent months. Growth in private demand has strengthened substantially more than expected, driven by both consumptionhousehold spending and investment. Activity and prices in the housing market are also continuing to pick up. Financial conditions have eased sinceover the2025 beginningand ofit theis year,uncertain creditwhether they remain restrictive. Credit is readily available to both households and businesses and the effects of earlier interest rate reductions are yet to flow through fully to aggregate demand, prices and wages. OnMore recently, the otherexchange handrate, money market interest rates and government bond yields have risen morefollowing recentlya rise in market expectations for the cash rate.
Various indicators suggest that labour market conditions remain a little tight. The unemployment rate has risen gradually over the past year and employment growth has slowed. However, measures of labour underutilisation remain at low rates, surveyed measures of capacity utilisation are above their long-run average and business surveys and liaison continue to suggest that a significant share of firms are experiencing difficulty sourcing labour. Wages growth, as measured by the Wage Price Index, has eased from its peak but broader measures of wages continue to show strong growth and growth in unit labour costs remains high.Various indicators suggest that labour market conditions remain a little tight and that they have stabilised in recent months, in line with the pick-up in momentum in economic activity. The unemployment rate has been a little lower than expected and measures of labour underutilisation remain at low rates. Growth in the Wage Price Index has eased from its peak, but broader measures of wages growth continue to be strong and growth in unit labour costs remains high.
There are uncertainties about the outlook for domestic economic activity and inflation and the extent to which monetary policy remainsis restrictive. On the domestic side, theif pick-upgrowth in momentumdemand hasis been stronger than anticipatedexpected, particularlyand growth in the privateeconomy’s sector.supply Ifcapacity thisremains continueslimited, it is likely to add further to capacity pressures. Uncertainty in the global economy remains significant but so far there has been minimallittle impactor no depressing effect on overallthe Australian economy; indeed, recent growth and trade in Australia’s major trading partners has surprised on the upside.
The recent data suggest the risks to inflation have tilted to the upside, but it will take a little longer to assess the persistence of inflationary pressures. Private demand is recovering. Labour market conditions still appear a little tight but further modest easing is expected. The Board therefore judged that it was appropriate to remain cautious, updating its view of the outlook as the data evolve.A wide range of data over recent months have confirmed that inflationary pressures picked up materially in the second half of 2025. While part of the pick-up in inflation is assessed to reflect temporary factors, it is evident that private demand is growing more quickly than expected, capacity pressures are greater than previously assessed and labour market conditions are a little tight.
The Board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target.
The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.
Today’s policy decision was unanimous.
Governor Michele Bullock addresses the media after the monetary policy decision.
Minutes of the Reserve Bank Board meeting, published two weeks after the decision.
The RBA's assessment of the economy that the Board considered in making its decision.
Powrót do porównania
Monetary Policy Decision3 lutego 2026Jastrzębi
Co zmieniło się w Monetary Policy Decision w dniu 3 lutego 2026?
RBA zaostrzył kurs, podnosząc stopę kasową o 25 punktów bazowych.
Bardziej jastrzębio niż poprzednio: Rada podniosła cel stopy do 3,85%. Teraz oczekuje inflacji ponad celem przez pewien czas z powodu silniejszego popytu i presji mocy wytwórczych.
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At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.85 per cent.
While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025. The Board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures. As a result, the Board considers that inflation is likely to remain above target for some time.
Capacity pressures reflect, in part, the greater momentum in demand seen in recent months. Growth in private demand has strengthened substantially more than expected, driven by both household spending and investment. Activity and prices in the housing market are also continuing to pick up. Financial conditions eased over 2025 and it is uncertain whether they remain restrictive. Credit is readily available to both households and businesses and the effects of earlier interest rate reductions are yet to flow through fully to aggregate demand, prices and wages. More recently, the exchange rate, money market interest rates and government bond yields have risen following a rise in market expectations for the cash rate.
Various indicators suggest that labour market conditions remain a little tight and that they have stabilised in recent months, in line with the pick-up in momentum in economic activity. The unemployment rate has been a little lower than expected and measures of labour underutilisation remain at low rates. Growth in the Wage Price Index has eased from its peak, but broader measures of wages growth continue to be strong and growth in unit labour costs remains high.
There are uncertainties about the outlook for domestic economic activity and inflation and the extent to which monetary policy is restrictive. On the domestic side, if growth in demand is stronger than expected, and growth in the economy’s supply capacity remains limited, it is likely to add further to capacity pressures. Uncertainty in the global economy remains significant but so far there has been little or no depressing effect on the Australian economy; indeed, recent growth and trade in Australia’s major trading partners has surprised on the upside.
A wide range of data over recent months have confirmed that inflationary pressures picked up materially in the second half of 2025. While part of the pick-up in inflation is assessed to reflect temporary factors, it is evident that private demand is growing more quickly than expected, capacity pressures are greater than previously assessed and labour market conditions are a little tight.
The Board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target.
The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.
Today’s policy decision was unanimous.
Governor Michele Bullock addresses the media after the monetary policy decision.
Minutes of the Reserve Bank Board meeting, published two weeks after the decision.
The RBA's assessment of the economy that the Board considered in making its decision.