The Reserve Bank board meets again next week, and the consensus among bank economists is not suspenseful: the cash rate is expected to stay at 4.35 per cent. The more useful information for business owners is what the forecasters say comes after, which is not much, for a while.
Why no cut
The RBA has been clear about what it wants to see before easing: softer inflation prints, a cooler jobs market and slower growth. CommBank's economists summarise the mood as a holding pattern, with rate cuts now viewed as a 2027 story, and they point to the lesson of 2025, when inflation bounced back quickly after early cuts. Once bitten, twice cautious.
What this means in practice
- Budget on rates staying put. If your cash flow forecast for the next twelve months assumes relief, rebuild it without the relief. A cut that arrives becomes a bonus instead of a rescue plan.
- Shop your facilities anyway. The cash rate holding still does not mean your rate must. Margins between lenders on overdrafts, equipment finance and business loans are wide, and lenders reprice for customers who ask, particularly customers with clean, up to date financials.
- Watch the expensive debt first. With the general interest charge on ATO debt no longer deductible, tax debt is now among the dearest money a small business can use. If you are carrying both a tax debt and unused capacity on cheaper finance, that arbitrage deserves a conversation with your adviser.
- Stress test, gently. If a customer paying 30 days late would break a month, the buffer is too thin for a high rate environment. Build the float now, while things are calm.
High rates reward exactly the habits this news page keeps banging on about: clean books, real forecasts and money set aside before it is spent. Boring remains undefeated.