Price pressures will come down much quicker than anticipated as consumer demand, particularly for services, drops, giving breathing room for the Reserve Bank to hold rates for the year ahead, predicts Micaela Fuchila, Bank of America Australia’s economist.

“They are done raising rates and the next move is down,” she says. She cautions, however, that the central bank isn’t likely to rush to cut rates because Australia’s tightening cycle lags other advanced economies.