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What to expect from the RBA meeting in December 2023

Mark Bristow avatar
Mark Bristow
- 6 min read
What to expect from the RBA meeting in December 2023

As 2023 draws to a close, it’s time to ask if the Reserve Bank of Australia (RBA) has one more rate rise left in the tank for the year. Economists from some of Australia’s leading banks have their own thoughts, based on new inflation data, comments from the RBA, and their own economic modelling for 2024 and beyond. 

One of the main drivers of the RBA’s previous 13 rate hikes since April 2022 has been the goal to bring Australia’s inflation rate down into a target band of between 2% and 3%. The most recent quarterly Consumer Price Index (CPI) from the Australian Bureau of Statistics (ABS) was 5.4%, with the next quarterly update due for release in January 2024.

The most recent monthly CPI figure came in at just 4.9%, down from 5.6% the month before. This is a steeper drop than expected, with many economists forecasting CPI only falling to 5.2% this month. However, it’s important to note that monthly CPI is considered a more volatile metric than the quarterly numbers, and also doesn’t include service inflation in its calculation.


Speaking at the HKMA-BIS High-Level Conference in Hong Kong, RBA governor Michele Bullock said that despite the rate rises over the past year, Australian households were managing:

"We have, like other countries, raised interest rates much more quickly than we have in the past, and that has created, in fact, a lot of political noise and a lot of noise from the general public. People are very unhappy. But what I'd like to highlight here is though, despite that noise, households and businesses in Australia are actually in a pretty good position. Their balance sheets are pretty good."

However, when speaking at the Australian Business Economists dinner, the governor said that Australia’s inflation challenge is increasingly homegrown and demand driven, and that the RBA must use its blunt tool of interest rates to “serve the welfare of Australians collectively.”

December 2023 is also set to be the last of the monthly meetings of the RBA board. Following the customary break in January 2024, the new meeting schedule is to begin from February 2024, with eight meetings to be held at the beginning and mid-point of each quarter of the year.

Federal Government

Federal Treasurer, Jim Chalmers, has declined to make predictions about the future trajectory of interest rates. However, he did describe a recent report from the Organisation for Economic Co-operation and Development (OECD), which forecasted interest rate cuts by the third quarter of 2024, as ‘encouraging’.

“I think it is important that we acknowledge that people still are under substantial pressure. We know that, we don't just acknowledge that, we're acting on that. We don't get too carried away by the monthly figures because we understand that inflation is still too high and those numbers bounce around a bit. But it remains the case that what we saw yesterday was a very substantial and a very welcome moderation in inflation.”


ANZ is forecasting that interest rates should stay on hold in December 2023, arguing that the RBA has increased the cash rate enough to reduce inflationary pressures coming from the labour market, and that weak retail sales in October 2023 show that Australian household budgets are under pressure.

However, ANZ also found that recent statements from the RBA governor indicate that future risks are skewed towards further monetary tightening:

“The strongest conclusion we drew from the RBA Governor’s speech to the ABE was that tolerance for upside surprises on demand or inflation are very limited. The RBA expects declines in inflation to be slow from here with a sustained period of sub-trend growth needed to bring a better balance between demand and supply.”

Additionally, while monthly inflation fell to 4.9%, this figure does not accurately reflect domestically driven and services inflation, which have been specifically namechecked by RBA Governor Bullock as inflation drivers.

Commonwealth Bank

Commonwealth Bank is still forecasting a hold in December 2023, though there is a risk that the RBA could raise rates again in February 2023 if economic data warrants it:

“The RBA Board does not want to tighten policy further.  But they will do so if the data makes that case that another rate increase is the right policy option.  For that to happen, there must be a clear signal in the domestic economic data that the policy rate is not sufficiently restrictive to bring inflation back to target over the period of time that the RBA Board deems acceptable.”

According to Commonwealth Bank, despite the RBA governor’s ‘hawkish’ language in regard to domestic demand-based inflation, “an upside surprise for Q4 23 CPI (released in January) will be required for a February hike.”

Commbank also forecast that “there will be further substantial easing in the annual rate of inflation over the rest of the year. There is a real chance that inflation prints with a 3-handle by December.”


NAB is also forecasting a hold in December 2023, but is warning that the cash rate may rise to 4.6% in February 2024, before staying on hold until late in that year. 

NAB also noted the RBA governor’s comments in Hong Kong regarding how Australia’s domestic inflation challenges:

“Ms Bullock also was more explicit around the mid-point of the 2-3%, which to us reinforces the RBA is likely to lag the global easing cycle given the RBA only forecasts core inflation at the very top of the 2-3% band by the end of 2025. NAB continues to see the RBA lifting rates again in February.”


According to Westpac, not enough new information has come to light for the RBA to make a cash rate hike in December 2023. However, the February 2024 meeting can already be considered ‘live’.

By the time of the February meeting, the RBA will have the full December quarter inflation data as well as the September quarter national accounts and other key data. We reaffirm our view that the RBA Board would raise the cash rate at that meeting if it sees further upside surprises to inflation or fresh evidence suggesting that inflation will decline more slowly than it intends.

However, Westpac also believes that the more likely outcome is that if inflation plays out in line with the RBA’s forecasts, it would be harder to justify further hikes, and rates would be left on hold.

To help you stay up to date with the latest changes to the national cash rate, as well as any adjustments to interest rates for home loans and savings accounts that follow, be sure to visit the RateCity RBA Rate Tracker hub.

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Product database updated 23 Jul, 2024

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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