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3 of big 4 banks predict May cash rate cut as ANZ updates forecast

Laine Gordon avatar
Laine Gordon
- 3 min read
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ANZ has today updated its cash rate forecast, pushing the first projected cash rate cut out from February to May 2025. 

The banks’ economic team has also reduced the predicted number of cash rate cuts from three to two 0.25 percentage point cuts. 

This means the bank expects the cash rate will settle at 3.85 per cent, instead of 4.10 per cent, by the end of next year. 

ANZ cash rate forecast

Change

Cash rate at the end of 2025

May 2025

-0.25%

4.10%

August 2025

-0.25%

3.85%

Source: ANZ economics. 

In explaining its decision, the ANZ economics team has said its forecast for trimmed inflation to fall within the RBA’s target band by the February meeting is ‘no longer looking likely enough’ for a rate cut at the first meeting of 2025, however, it is not ruling it out. 

Three of the big four bank economic teams now believe the next move from the RBA will be a 0.25 percentage point cut in May 2025. 

NAB and Westpac pushed back their forecasts for the timing of the first cash rate cut from February to May 2025 on the 14th and 21st of November, respectively. 

CBA still predicts the first cash rate cut will come in February next year. 

Current big four bank cash rate forecasts

First cut

No. of cuts forecasted

CBA

Feb-25

4

Westpac

May-25

4

NAB

May-25

5

ANZ

May-25

2

RateCity.com.au money editor, Laine Gordon, said: “This move from ANZ is a sharp reminder for borrowers that they shouldn’t wait for the RBA to get themselves a rate cut.”

“Three of the big four banks’ economics teams agree that rate relief from the RBA is moving further into the horizon,” she said. 

“If CBA’s on the money, households could see rate relief as early as February next year. However, if ANZ, Westpac and NAB forecasts materialise, households will be waiting at least six months until May.

“There’s no crystal ball showing the future for the cash rate, which is why, if you’ve got a mortgage and you want to see your repayments go down, then you need to take matters into your own hands. 

“There are now more than 40 lenders on the RateCity database with variable rates under 6 per cent. Plenty of people think refinancing isn’t worth the effort, until they actually take the plunge and then kick themselves for not doing it sooner,” she said. 

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