RESIDENTS in Brisbane and its surrounds are heading into 2026 facing continued economic pressure, with inflation still sitting above the Reserve Bank of Australia’s (RBA) 2-3 per cent target and further interest rate cuts now considered highly unlikely.
The cash rate remains at 3.6 per cent, offering little short-term relief for mortgage holders as cost-of-living pressures persist.
Recent Australian Bureau of Statistics data shows headline inflation eased to 3.4 per cent in the 12 months to November 2025, down from 3.8 per cent in October. However, much of that easing was attributed to temporary factors such as Black Friday discounts.
The RBA’s preferred trimmed mean inflation measure dipped only marginally to 3.2 per cent, still above the target range.
Housing costs, including rents and new dwellings, continue to place upward pressure on prices.
In an interview with ABC News on January 8, 2026, RBA Deputy Governor Andrew Hauser described the latest data as “helpful” but said it offered “not a lot of news” and was broadly in line with expectations.
He was clear that inflation above 3 per cent remains too high, and confirmed the likelihood of further rate cuts in the near term is “very low”, suggesting Australians have likely seen the last cuts for this cycle.
The RBA, he noted, continues to take a one to two-year view on inflation to avoid repeating the economic pain of recent years.
Economic forecasters are echoing that caution.
Oxford Economics Australia has described the economy as sitting in an “awkward position”, with inflation showing signs of re-acceleration as domestic demand strengthens and energy subsidies unwind.
Head of Economic Research Harry Murphy Cruise said rate cuts are effectively off the table for 2026, with the RBA expected to prioritise patience.
While Oxford Economics forecasts underlying inflation easing to 2.8 per cent by the end of 2026, this is expected to be supported by rising unemployment and softer hiring conditions.
In sectors important to Brisbane, including construction, tourism and services, job conditions may tighten.
Major banks remain split on the outlook, with CBA and NAB forecasting a modest rate hike in February, while Westpac and ANZ expect rates to hold.
