Business Confidence Plummets as Rate Hike Looms
Update: 2025-12-09
Description
Business confidence plummets to a seven-month low as borrowers lose hope for further interest rate cuts. The Reserve Bank is expected to keep the cash rate steady at 3.6% during its final meeting of the year. Inflations resurgence has shifted expectations, with the market now predicting a rate increase rather than a decrease. Despite the drop, more businesses remain optimistic than pessimistic, though the gap is narrowing. Business conditions have declined, with lower profitability and weaker trading reported. However, businesses are utilizing their capacity at an 18-month high, suggesting the economy may be operating at full potential, a concern for the Reserve Bank as it manages inflation.
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