Westpac officially alone in forecasting more 2025 RBA rate cuts

The smallest big four bank now expects the RBA's next downwards move won't come until early 2026 at the soonest – three months later than previously forecast. 

The RBA board still has two meetings scheduled in 2025, over 3-4 November and 8-9 December, but Westpac now stands alone in expecting any of them to deliver a cut.

ANZ: Next RBA rate cut to come in February

"We now forecast the next rate cut to occur in February, which would seem the first plausible month for easing," ANZ senior economist Adelaide Timbrell and head of Australian economics Adam Boyton said on Friday morning.

"Depending on how the upcoming data land, the RBA board might however wait longer to be certain that inflation is sustainably heading toward the midpoint of the target band."

ANZ has also cooled its outlook for future cuts, potentially signalling less relief ahead for variable rate home loan borrowers.

"We remain of the view that a final easing to 3.35% is more likely than not, although the most likely scenarios are one or no cuts, instead of one versus two or more," Ms Timbrell and Mr Boyton said.

ANZ adjusts inflation expectations

ANZ's new RBA forecast is a response to its updated inflation expectations.

The bank now expects the central bank's preferred trimmed mean inflation measure to have risen 0.9% over the three months to the end of September.

That would see the annual inflation rate rise to 2.8% – up from 2.7% in the June quarter.

"A 0.9% quarter-on-quarter trimmed mean print would see the two-quarter trimmed mean pulse annualising around – even above – the top of the RBA's 2% to 3% target band and a stalling in year-on-year disinflation," the bank's economists said.

However, they believe such an acceleration would be a "hiccup" and not the beginning of a new inflation trajectory.

Westpac alone in predicting another 2025 rate cut

ANZ's move follows similar pivots from NAB and CommBank.

NAB scrapped its predictions of a November cut and pushed its forecast for the next RBA cut back to May 2026 ahead of the RBA's September meeting.

CommBank made a similar move on Wednesday.

Like ANZ, it's tipping a February 2026 cut.

Westpac is now the only banking giant eyeing a rate cut in November, with chief economist and former RBA assistant governor Luci Ellis warning such a movement is "far from assured".

"The longer the [RBA monetary policy board] delays further cuts, the more likely it is that it will end up cutting by more than it currently envisages," she said.

Prior to the RBA's September meeting, Westpac was predicting cuts in November, February 2026, and May 2026.

It doesn't appear to have altered that forecast in the days since.

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