It’s over: Big bank bombshell warns no more rate cuts coming

A surge in housing prices is adding to pressure.

One of Australia’s four biggest banks has issued a bombshell, warning homebuyers and owners hoping for more mortgage relief of no more rate cuts “from here”.

The warning comes as the ANZ Bank issued its latest Macro summary on Friday flagging a possible impact on its forecast November rate cut – and all of those going forward.

This as the country saw “solid GDP growth of 0.6 per cent quarter on quarter despite no growth in public demand in Q2”.

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ANZ has flagged momentum underway that could put further rate cuts on the backburner for the current cycle. Picture: NewsWire / Damian Shaw

That signals “the private sector recovery is underway”, ANZ said, something the Reserve Bank will likely take to heart along with the fact that the effects of several rate cuts are yet to be felt, and house and rental prices are at record highs.

“We still think a rate cut in November is more likely than not; but the GDP figure increases the chances of there being no rate cut in November or, indeed, at all, from here,” the ANZ report said.

“If evidence of consumer spending momentum continues and weakness does not emerge in the CPI or labour market data, the RBA may assess the cash rate as broadly neutral with no further cuts needed.”

“Rising housing prices could add to consumer momentum, with capital city housing prices up 0.8pc m/m in August, the largest monthly increase since May 2024.”

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The private sector recovery is underway. Source: ANZ Bank

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It said “the RBA will likely interpret the strong increase in private demand – in particular the 0.9pc q/q growth in household consumption – as a sign of economic momentum. It will be aware that the data do not capture the August rate cut or the full impact of the May rate cut.”

ANZ said the pick-up in consumer spending included a full percentage point drop in the household savings ratio to 4.2 per cent.

It said it was “not materially impacted by electricity rebate roll-offs (which mechanically shifts spending from the public sector to consumers in national accounts data).”

“The July household spending indicator, at 0.5pc m/m, reinforces this momentum.”

The next big data drop will be the monthly NAB Business Survey on Tuesday, which was widely expected to continue to show an “uptrend in conditions”.

The next RBA monetary policy board meeting is scheduled for September 29-30, with the interest rate decision announced at 2:30pm AEST on September 30.

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