RBA Statement on Monetary Policy – November 2025

Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and potential supply closer towards balance. More recently, however, inflation has picked up. Trimmed mean inflation was 1.0 per cent in the September quarter and 3.0 per cent over the year, up from 2.7 per cent over the year in the June quarter. This was materially higher than expected at the time of the August Statement on Monetary Policy. Headline inflation rose sharply to 3.2 per cent over the year in the September quarter, a large part of which was expected given the cessation of electricity rebates in a number of states. The Board’s judgement is that some of the increase in underlying inflation in the September quarter was due to temporary factors. The central forecast in the November Statement on Monetary Policy, which is based on a technical assumption of one more rate cut in 2026, has underlying inflation rising above 3 per cent in coming quarters before settling at 2.6 per cent in 2027. RBA: Central forecast November statement anticipates underlying inflation rising above 3 per cent in coming quarters before settling at 2.6 per cent in 2027. RBA: Various indicators suggest that labor market conditions remain tight Australian GDP expected to remain near 2% annually over the next three years, says RBA.

Economic activity in the manufacturing sector contracted in October for the eighth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report. The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The Manufacturing PMI® registered 48.7 percent in October, a 0.4-percentage point decrease compared to the reading of 49.1 percent recorded in September. The overall economy continued in expansion for the 66th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for the second month in October following one month of growth; the figure of 49.4 percent is 0.5 percentage point higher than the 48.9 percent recorded in September. The October reading of the Production Index (48.2 percent) is 2.8 percentage points lower than September's figure of 51 percent. The Prices Index remained in expansion (or 'increasing' territory), registering 58 percent, down 3.9 percentage points compared to the reading of 61.9 percent reported in September. The Backlog of Orders Index registered 47.9 percent, up 1.7 percentage points compared to the 46.2 percent recorded in September. The Employment Index registered 46 percent, up 0.7 percentage point from September's figure of *US OCT. ISM MANUFACTURING INDEX FALLS TO 48.7; EST. 49.5 *US OCT. ISM MANUFACTURING NEW ORDERS RISES TO 49.4 VS 48.9 *US OCT. ISM MANUFACTURING EMPLOYMENT RISES TO 46 VS 45.3 *US OCT. ISM MFG PRICE INDEX FALLS TO NINE-MONTH LOW OF 58 ISM: US manufacturing activity worsens in October Manufacturing activity in the United States followed a downward trajectory in October compared to the month prior, the Institute for Supply Management (ISM) announced in its report on Monday. The Manufacturing PMI stood at 48.7% in the reported month, falling 0.4% compared to September's figure of 49.1%. Meanwhile, the Employment Index increased 0.7% to 46%, while the Production Index retreated 2.8% to land at 48.2%. The New Orders Index was 0.5% higher compared to the previous month, settling at 49.4%, though it remained below the 50% threshold, indicating contraction. The Prices Index was 58%, decreasing 3.9% on a monthly basis. "In October, U.S. manufacturing activity contracted at a faster rate, with contractions in production and inventories leading to the 0.4-percentage point decrease of the Manufacturing PMI®. A chain reaction of one-month index improvements started with New Orders in August and flowed to Production in September," ISM Chair Susan Spence commented.

RESERVE BANK OF AUSTRALIA GOV BULLOCK: POOSIBLE LESS EASING NIGHT BE NEEDED IN THIS ROUND THAN IN PAST DID NOT CONSIDER CUTTING RATES DISCUSSED HOLDING AND OUTLOOK FOR POLIOCY, BEING CAUTIOUS RBA's Governor Bullock: possible no more rate cuts, possible some more RBA Governor Bullock: annual core inflation above 3% is not ideal RBA's Governor Bullock: best estimate unemployment rate will remain relatively stable RBA's Governor Bullock: board targetting 2.5% for inflation