RBA rate cut live updates: Reserve Bank cuts interest rates as big four banks begin to pass on cut

The Governor has started her address by acknowledging it has been a challenging period but said it was necessary to get on top of because “inflation hurts everyone”.

“When inflation is low and stable and people can get jobs. It’s good for households, it’s good for communities, it’s good for the broader Australian economy.”

With inflation down, the Board is turning to the international economy which Ms Bullock calls “a complete rolleroaster”.

They see growth slowing for trading partners, which is filtering down to Australia.

“If the trade outcomes are much worse for the global economy, though, we could be facing a much larger downturn in Australia with implications for inflation and unemployment.”

And then there was one!

All but Westpac has confirmed a rate cut, although I should qualify that we’re expecting Westpac to follow suit shortly.

“While Australians have shown great resilience, facing economic challenges directly and adapting to rising costs and uncertainty, some may still be struggling,” ANZ Group’s executive Australia retail, Maile Carnegie said.

“We remain committed to supporting our customers through tailored solutions and urge them to reach out sooner rather than later to discuss options for any additional support required.”

They’re dropping like dominoes now, with CBA the next one in line.

“Today’s decision will help to deliver some much-needed additional relief for many Australians with a mortgage,” the bank’s group executive, retail banking services, Angus Sullivan said.

“When combined with the February rate cut this change should free up some more cash flow for homeowners who need it. We know many have had tighter budgets in recent months and will welcome that additional flexibility.

“Today’s announcement of a 0.25 per cent p.a. rate cut will help to deliver a monthly saving of approximately $80 for home loan customers making principal and interest repayments on an average loan size of $500,000. After two rate cuts many home loan customers will start to see a more meaningful change month to month.”

NAB has become the first of the big four banks to cut its variable home loan rates.

The bank announced it will decrease its standard variable home loan interest rate by 0.25 per cent per annum, effective from May 30, following the Reserve Bank’s decision to reduce the official cash rate.

“We’re pleased to announce that the variable rate on NAB home loans is decreasing. This provides some relief for those customers still dealing with cost of living challenges,” NAB Group executive for personal banking Ana Marinkovic said.

A customer with a 30-year mortgage of $550,000 would save $83,000 in interest over the life of the loan.

“I was really pleased to see in the statement released by the Reserve Bank the three main points that the monetary policy board has made.

“First of all, inflation has fallen substantially since its peak, and the upside risks to inflation have diminished.

“Secondly, it does recognise, I think, in ways that the Government recognises, that global uncertainty has increased in recent times.

“It also points out, though, that the household incomes have picked up in our economy as well. And that’s a good thing, too. Today’s interest rate cut doesn’t mean that the job is finished when it comes to the cost of living, but it will help millions of Australians with a mortgage.

“And it’s worth remembering that three years ago this week, this government came to office. When we came to office, inflation and interest rates were both going up, and now, both are going down, and that’s a good thing.”

“It reflects the progress we’ve made in the economy and recognises the uncertain global environment as well.

“When it comes to inflation, headline and underlying inflation are now both in the Reserve Bank’s target band for the first time in almost four years.

“And this is the first time since records began that we’ve got the unemployment rate in the low 4s at the same time as we’ve had both measures of inflation in the target band.”

The Treasurer is speaking now.

“This is the second interest rate cut in the last three months. This is very welcome relief for millions of Australians,” Dr Chalmers said.

“We are really pleased to see more help is on the way. And that’s what this decision today is all about.”

Former Sunrise host David Koch, who now works for Compare the Market, was one of the first to respond after the rate cut was announced.

“For years, the Reserve Bank has been lecturing us saying ‘we got to get inflation under control, we’ve all got to do our bit, we’ve got to tighten our belts, we’ve got to cut back household spending’,” Mr Koch said.

“That’s what we have done, now the inflation target is down within the Reserve Bank’s 2 to 3 per cent target range. We absolutely should be rewarded for doing the right thing.

“Today’s rate decision will make a huge difference for families struggling under the weight of higher repayments. We know the average borrower has been spending roughly $18,000 more each year on their home loan since rates reached their peak.

“That’s a heavy burden when the cost of everything else from insurances to council rates and energy bills are also causing a lot of pain.”

“Uncertainty in the world economy has increased over the past three months and volatility in financial markets rose sharply for a time,” the board said in a statement.

“While recent announcements on tariffs have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries.”

A second dose of mortgage relief is on the way for Aussie borrowers after the Reserve Bank lowered interest rates 0.25 percentage points on Tuesday.

The RBA’s move follows a cut in February and will reduce the official cash rate to 3.85 per cent.

Financial markets had considered the rate reduction near-certain ahead of the meeting.

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