It's Wednesday, the 1^st of October 2025, and the Reserve Bank has sounded a note of caution about inflationary pressures, wavering in confidence about whether price rises are under control, and diminishing the chance of rate cuts later this year. The central bank yesterday left the official cash rate unchanged at 3.6 per cent and warned that inflation is on track to overshoot its forecasts. The board said that the decline in underlying inflation had slowed since its August meeting and recent data, while partial and volatile, suggests inflation might be higher than expected.

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News in brief

Prime Minister Anthony Albanese says Australia welcomes US President Donald Trump’s plan for a peace deal in Gaza, highlighting that it would exclude Hamas from any future governance.

The AUKUS pact has been meeting its milestones and is delivering in the interests of all parties, according to the Prime Minister, who was commenting after a report indicated the deal would clear a review by the Pentagon in time for Albanese’s trip to the US this month.

Seven West Media plans to merge with Australia’s biggest radio company, Southern Cross Media, to create a $415 million television, radio and publishing group. As part of the deal, Kerry Stokes, the chair of the Seven network, would exit. Southern Cross owns the Triple M and Hit networks, while Seven owns The West Australian newspaper and the Seven Network, which has AFL and cricket broadcast rights.

Singtel chief executive Yuen Kuan Moon and Optus chief Stephen Rue have blamed Optus staff for Triple Zero outages that have been linked to four deaths, as Federal Communications Minister Anika Wells said the company must appoint an independent, external adviser to oversee its business.

President Donald Trump is slapping a 100 per cent tariff on films made outside of the US, reiterating a threat he made earlier this year against the movie industry and potentially harming the Australian film industry.

Fear-o-meter

What a difference a week can make. Seven days ago, Reserve Bank Governor Michele Bullock sounded sanguine about inflationary pressures, telling a parliamentary committee that the economy is in good shape.

A couple of weeks ago, the central bank’s chief economist Sarah Hunter suggested inflation had been slayed.

However, the mood has changed. Monthly inflation figures, which provide some insight, but not the complete story, seem to have raised concerns inside RBA HQ. Suddenly the bank thinks inflation might overshoot.

Bullock has shown she doesn’t mind keeping rates elevated. She will stand up to political pressure to cut rates. And thus far she has been proven correct.

A rate cut this year will depend very much on what September quarter CPI data says at the end of the month. And if the bank isn’t sure, it won’t cut rates.

Business By Numbers

The top 3 numbers to know for the week, brought to you by Xero

3.6pc: Not only the official cash rate, but also the three year bond rate, suggesting investors believe rates will, on average, be at this level for the next three years.

$US3,800 per ounce: the latest milestone passed by the price of gold this week.

$415 million: the value of the proposed merger between Seven West Media and Southern Cross Media. Big, but not that big, compared to the giants of the ASX.

Fear & Greed Q+A today

On what business needs to do to improve productivity:

 

"Business just can't rely on government and government alone and nor should it... There's three Ds we talk about. Sean, one is decarbonisation, diversification is another, and also digitalisation, and businesses are heading down the track on all three of those at the moment. Decarbonising to fit in with government policy... but also good practice for customers, for suppliers and the like. Very important for us to help move towards our net zero by 2050 targets. 

 

Diversification is looking at new markets, new products, new ways of working basically. And digitalisation fits into that. We all talk a lot about artificial intelligence, but we're also looking at things like automation and robotics. So business is looking to become more productive in its own way and in ways they can because the world around them is changing. Global trade is changing.... this pressure has been put on right up and down supply chains for businesses to become more productive and more adaptable. 

 

A lot of this is [also] being driven by labour and skill shortages in Australia... which is meaning business got to find new ways to get product to market quicker, more cheaply and more competitively."

Greed-o-meter

Australia’s housing market is heating up, with September delivering the strongest monthly rise in national dwelling values since October 2023. The Cotality Home Value Index jumped 0.8% last month, driven by capital city momentum and record low listings.

Source: Cotality

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