With the RBA November cash rate hold and no cuts expected until 2026, operators can use our brokers to secure the lowest equipment interest rates in the market. Businesses and households were hoping for a rate cut before the end of the year. But the release of the key inflation data just prior to the Reserve Bank Board’s meeting, quashed the possibility of a rate cut.
That key data was the September Quarterly Consumer Price Index, commonly referred to as the inflation figures. The Australian Bureau of Statistics (ABS) released the figures on 29 October, and rather than the recent downward trend, the report revealed that the Consumer Price Index had risen 1.3% in the quarter. Increasing the annual inflation figure to 3.2%. This is up from the 2.1% to the June quarter.
ABS Head of Prices Statistics, Michelle Marquardt said that the rise was the highest for a quarter since March of 2023 and the highest annual inflation rate since June of 2024. Noting electricity costs as the largest contributing sector to the increase.
Inflation figures are integral to RBA monetary policy. The Bank has been targeting 2-3% inflation. The news took the markets and analysts by surprise and sent shocks through the sharemarket and to businesses and households hoping for that rate cut.
When the RBA Monetary Policy Board met on 4 November, the decision was to leave the cash rate on hold. What does this mean for asset finance rates? When will there be a rate cut? Can operators secure affordable rates? This update covers on the key issues and provides direction on securing competitive asset financing rates for your equipment acquisitions.
RBA Update
The decision by the RBA Monetary Policy Board at its 4 November meeting was to hold the cash rate at 3.6%. In announcing the decision, RBA Governor Michele Bullock noted the pick-up in inflation and that the September figures were higher than expected when the August Monetary Policy statement was issued.
Ms Bullock said some of the factors behind the rise in inflation were temporary. The forecast in the November Monetary Policy statement was for underlying inflation to increase above 3% over the quarters ahead before lowering to 2.6% in 2027.
While economic activity in Australia was recovering, Ms Bullock highlighted the uncertainty in the outlook and for inflation on both the domestic and global perspective. Global uncertainty remains at a high level and developments in trade policy are expected to have adverse effects on global growth.
Due to persistent inflation which the Board says may remain and the tight labour market, decision was made to ‘remain cautious’ and leave the cash rate on hold. The next meeting of the Monetary Policy Board and next rate decision is on 9 December.
What is the outlook for asset finance interest rates?
Businesses keen to maximise returns on equipment acquisitions will no doubt be wondering, when will there be another rate cut? As is standard procedure in announcing the November decision, the RBA did not provide any indication around future decisions. Saying only that it would be watching the data as it evolved.
Commentary and reaction from the markets, analysts and other specialists tends to forecast that a rate cut could be as far away as beyond the February RBA meeting. More information on the RBA’s thinking may be gleaned when the Minutes of the November meeting are published to the Bank’s website on 18 November.
How can businesses get best asset finance interest rates?
For operators looking to purchase new equipment and machinery, competitive rate finance can be secured. Some lenders may have reduced rates in anticipation of a November cash rate cut. Though it is typical for most banks and lenders to await the RBA decision before altering their pricing.
With no decrease to the cash rate, most lenders will leave their own rates on hold. But with varying across the lending market, better rates can be found. With our large selection of lenders we have the resources to secure customers their most affordable rate on Chattel Mortgage, Asset Lease, Commercial Hire Purchase and Rent-to-Own loans.
Business owners can also contribute to achieving their best rate by maintaining a good payment and credit history and minimising debt levels. Consideration can also be given to the size of the loan required. A larger loan in comparison to the value or price of the equipment may attract a higher rate. Making a larger deposit in addition to any trade-in available, may result in less being required for the finance and potentially a better rate offer.
To start planning and preparing asset acquisition budgets, refer to our current rates and use the finance calculator to establish preferred terms and loan levels.
For competitive asset finance interest rates, contact Jade Equipment Finance 1300 000 003.
DISCLAIMER: IF MISINTERPRETATIONS, MISREPRESENTATION OR ERRORS EXIST IN THIS ARTICLE, NO LIABILITY IS ACCEPTED. THE INFORMATION IS PROVIDED ONLY FOR GENERAL PURPOSES AND NOT IN ANY MANNER INTENDED AS THE ONLY SOURCE FOR MAKING FINANCIAL DECISIONS. THOSE THAT CONSIDER THEY REQUIRE ADDITIONAL GUIDANCE OR ADVICE SHOULD REFER TO AN INDEPENDENT FINANCIAL ADVISOR.
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