This is an archived update from August 2026. For the current cash rate and the most recent decision, see our rate updates page.
- Cash rate: 4.35%
- Decision: hold, unanimous
- Announced: 11 August 2026
What the Board decided
The Reserve Bank left the cash rate at 4.35% on 11 August 2026, and the decision was unanimous. It was the second hold in a row, after three increases in February, March and May took the rate from 3.60% to 4.35%.
The Board’s view was that inflation is still too high. June quarter headline inflation eased to 3.8% and trimmed mean inflation held at 3.6%, which came in under the Reserve Bank’s own forecast. That softer reading was the main reason a hold was widely expected. The Board did not expect inflation back near the middle of its 2% to 3% target band until late 2027, and said it would raise the cash rate again if the risks it was watching came through.
The Board also noted that momentum in the housing market had shifted, with prices falling in some capital cities and new home loans down noticeably. Financial markets were pricing roughly a 50% chance of one more increase before the end of the year, so it read as a pause rather than a turning point.
What the economists said
The hold was as widely expected as these decisions get. Every one of the 37 economists in a Reuters poll taken before the meeting tipped no change, and most of them expected the cash rate to stay where it was for the rest of the year. ANZ, CBA, NAB and Westpac all took the view at the time that the cash rate had already peaked.
Westpac senior economist Matthew Hassan said rates should stay on hold into next year unless inflation picked up again, on the basis that rate rises take time to work through the economy and a fresh increase gets harder to justify the closer we get to the end of the year. CBA also expected a hold through the rest of 2026, and pointed to an escalation in the Middle East conflict, and what that would do to oil prices, as the main thing that could change its view. That is close to what happened six weeks later.
Not everyone was convinced the increases were finished. In Finder’s survey of economists and property experts, 44% still expected another rise before the end of the year, and market pricing sat at roughly a 50% chance. Governor Michele Bullock was careful at her press conference to say the Board remained concerned about inflation and expected a period of subdued growth would be needed to bring it down. Her language kept the door open rather than shutting it.
Our broker’s take
Chief executive and founder of mortgage broker Well Money, Scott Spencer, says the decision is worth keeping in perspective. “A hold is good news, but it is not the same as rates coming down. If you took your loan out in the last couple of years you can be paying a lot more than you were. A hold on rates only means the repayment increases stop getting worse for a while.”
His advice is to treat it as a good week for a check up and two things are worth spending a few minutes on. The first is finding out the rate you are actually on, then comparing it to what your own lender is advertising to new customers right now. “After three increases in a year, the gap between existing customer rates and new customer rates has widened at a lot of lenders. Loyalty is not what gets you a better rate.”
The second is working out the new repayment on any fixed rate ending in the next twelve months, rather than finding out when the first one comes out of your account. Scott also points out that lenders do not all move together. “Several have repriced outside the cash rate cycle this year, in both directions. The Reserve Bank sitting still does not mean nothing is happening to your rate. Competition for home loans is more aggressive than we have seen in years and there are lots of great options out there.”
That is the part we do for a living. We are mortgage brokers, so we compare across a panel of bank and non-bank lenders, and we know how each one reads a file. Call us on 1300 899 724 or book a time to talk it through.