News
Wealth Pi Fortnightly Economic Snapshot
Interest Rates
The RBA had reduced the cash rate three times this year as inflation returned to its target band and the labour market is showing early signs of softening.
The market is pricing in a 50 per cent probability that it will cut rates in November, with many economists now forecasting no rate cuts until February 2026.
RBA
On 30 Sep 2025, the RBA Board decided to leave the cash rate unchanged at 3.60 per cent, citing a slowing in the decline of underlying inflation with both headline and trimmed mean within the 2 to 3 per cent range in the June quarter and indications that September quarter inflation may be higher than expected, alongside a recovery in domestic activity led by private demand, a strengthening housing market, and broadly steady labour market conditions with the unemployment rate at 4.2 per cent in August; uncertainty in the global and domestic outlook remains elevated. The decision was unanimous, and the Board reaffirmed its commitment to price stability and full employment, emphasising a cautious data driven approach and readiness to act decisively if risks to activity or inflation emerge
Australian Markets
The monthly Consumer Price Index (CPI) indicator rose 3.0 per cent in the 12 months to August 2025, up from 2.8 per cent in July and marking the highest rate since July 2024.
Australia’s labour market held steady in August, with the unemployment rate unchanged at 4.2 per cent as a 41,000 fall in full-time jobs was offset by a 36,000 rise in part-time work. The participation rate eased to 66.8 per cent and hours worked slipped 0.4 per cent, while trend data showed unemployment inching up to 4.3 per cent. Employment and total hours were still 1.7 per cent higher over the year, suggesting underlying resilience. Job vacancies declined 2.7 per cent in the three months to August, led by private-sector weakness, with Victoria and the ACT recording the sharpest falls and the Northern Territory a strong rise. Overall, steady headline unemployment alongside softer full-time work and easing vacancies point to a labour market that remains tight but is beginning to cool.
Global Markets
In September, the U.S. economy showed continued resilience, with the Atlanta Fed’s GDPNow model estimating third-quarter growth at 3.9 percent as of September 26. The Federal Reserve lowered the federal funds rate by 25 basis points to a target range of 4.00 to 4.25 percent at its September meeting, aiming to balance still-elevated inflation against signs of a cooling labour market. Housing supply growth moderated toward the end of the month, while the University of Michigan survey reported weaker consumer sentiment.
The Bank of England kept the policy rate unchanged at 4 percent on September 18. Rightmove’s September house price index indicated that the national average asking price rose 0.4 percent from the previous month but remained 0.1 percent lower than a year earlier. Mortgage rates continued to ease at the sharper end of the market, with some two-year fixed products around 3.6 percent for low LVR borrowers, although broader averages remained closer to 5 percent.
Property
In September 2025, Cotality’s index of the five major capitals showed dwelling values rising 0.9 percent, led by Perth (+1.6%), Brisbane (+1.1%) and Adelaide (+0.9%), bringing quarterly growth to 2.3 percent. Over the first three quarters of 2025, values rose 4.6 percent, with Brisbane (+7.2%) and Perth (+6.4%) outperforming. Auction clearance rates climbed to their highest monthly average since June 2023. Policy momentum added to demand, with the Albanese government’s 5 percent deposit scheme for first-home buyers coming into effect, forecast by Lateral Economics to add 3.5 to 6.6 percent to national prices in 2026, and up to 9.9 percent in segments below the scheme’s price caps. With further RBA rate cuts likely, price expectations have surged to a 15-year high, while Cotality’s latest chart pack placed the average Australian dwelling value above AUD 1.035 million.
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