RBA expected to give mortgage holders ‘breathing capacity’ on interest rates

The governor of the Reserve Bank of Australia, Michele Bullock. The market is pricing in a 90% chance of a 25 basis point decrease on Tuesday, according to the ASX’s rate indicator. Photograph: Mike Bowers/The Guardian

The Reserve Bank is expected to provide “breathing capacity” to households with mortgages by cutting the official cash rate for the first time since the early days of the Covid pandemic.

The market is pricing in a 90% chance of a 25 basis point decrease on Tuesday, according to the ASX’s rate indicator, although several economists have warned they expect the decision to be closer than the odds suggest.