RBA holds the cash rate at 4.35%: why your labour bill won't ease

On 11 August 2026, the Reserve Bank of Australia held the cash rate at 4.35%, and Governor Michele Bullock made clear the Board still isn't thinking about cuts. For hospitality, retail, and healthcare operators who absorbed July's award wage rise, a steady rate is less relief than a signal to get labour planning right now.

The bottom line: rates held, but the pressure on your labour budget didn't.

Key takeaways

• The RBA held the cash rate at 4.35% on 11 August 2026 after June quarter inflation eased to 3.8%

• Shift-based employers face "higher for longer" financing costs on top of the 1 July award pay rise

• Use this hold to tighten roster-to-demand planning, because economists are split on a November move

What the RBA decided

The RBA left the cash rate at 4.35%, matching what markets and every major bank expected. The Reserve Bank raised the rate three times earlier in 2026, in February, March, and May, lifting it from 3.60% to 4.35%, then held in June.

The June quarter Consumer Price Index was the deciding input. Headline inflation eased to 3.8% in the year to June, down from 4.0% in May, while the RBA's preferred trimmed mean measure held at 3.6%. That softer print eased the pressure on the RBA to tighten again at this meeting.

The banks moved with the data. After the CPI release, Commonwealth Bank, NAB, ANZ, and Westpac all forecast a hold, and Westpac, previously the lone hawk forecasting an August hike, revised its forecast to a hold.

Why a hold still stings for shift-work businesses

A hold is not the same as a break. When the cash rate stays at 4.35%, the borrowing and financing costs behind fit-outs, equipment, and working capital stay high too. For a cafe or a small retail group, that pressure doesn't ease just because the number didn't change.

Housing remains the biggest driver of inflation, rising 6.8% over the year. That keeps cost-of-living pressure on your customers and your team at the same time.

Then there's payroll. The Fair Work Commission's 2026 Annual Wage Review lifted modern award rates by 4.75% and the National Minimum Wage by 6%, to $26.44 per hour, from the first full pay period on or after 1 July 2026. Most of your award-covered team felt that rise weeks before this meeting (see our complete breakdown of the 2026 Fair Work Wage Decision).

The risk that isn't off the table

The decision matters less than what Governor Bullock says next. The signal to watch is whether the Board keeps or softens its earlier warning that it would raise the cash rate further if required.

The outlook past August is genuinely split. Finder's RBA Cash Rate Survey found 55% of economists expect at least one further rate increase in 2026, and ANZ has warned the probability of a hike by November has risen sharply. No major bank forecasts a cut before 2027, with NAB forecasting the first cut in June 2027.

There are softer signs too. Unemployment sits around 4.4%, above the RBA's 4.2% forecast for the June quarter, which points to a labour market that is loosening. For operators, that mix means planning for both weaker demand and the chance of another rate rise. Our Federal Budget takeaways for shift-work businesses cover more of the cost pressures shaping the year.

Operational strategy: rostering to real demand

When interest rates and wage floors remain elevated, labour becomes the single largest cost operators can actively control week to week. Managing this hold well means moving away from reactive, habit-based scheduling toward data-driven schedule management.

The focus for the remainder of 2026 must be alignment. Managers who evaluate foot-traffic patterns and hourly sales velocity can staff precisely to trade volume, spotting cost leakage before it hits the profit-and-loss statement. With award rates up and borrowing costs still high at 4.35%, the next stretch will separate operators who manage workforce planning intentionally from those reacting shift to shift. The businesses that treat this hold as a window to sharpen their rostering, rather than a pause to wait out, will be the best placed when the cycle finally turns.

Finding efficiencies beyond the roster

It’s also worth looking at the other costs involved in running your workforce. Businesses using separate platforms for rostering, HR, time tracking and payroll may be paying more in subscription fees than they need to. Disconnected systems can also create hidden costs through duplicate data entry, manual handovers and avoidable errors. Bringing more of these processes together can help cut unnecessary software and admin costs, giving businesses another way to find efficiencies while the costs they can’t control remain high.

Disclaimer: While Deputy's platform is designed to simplify shift work and payroll through automation, this document is for informational purposes only and does not constitute legal or financial advice. It is ultimately each customer's sole responsibility to pay their employees correctly and in compliance with all legal and regulatory requirements. Please review our Product Specific Terms for more information.