Canstar data insights director Sally Tindall said the Reserve Bank of Australia would be watching for new labour force data on Thursday, while the quarterly Consumer Price Index results will arrive in just over a fortnight.

“If trimmed mean inflation lands close to the top of the RBA’s target band, and services inflation shows clear signs of improvement, we could see the Board cut the cash rate as soon as February in its first meeting back from the summer break,” she said.

She said banks could start to move fixed rates later in January if the RBA’s upcoming February decision started to become clearer.

“It has been a whisper-quiet start to the year, as expected, with no lenders changing rates this week and just one lender – Bank of China – cutting a handful of rates last week,” Tindall said.

When rates did shift, though, she said it was expected to flow on swiftly among the banks.

“Competition among the low-cost lenders is likely to fire back up immediately following a cash rate cut, as borrowers start to refocus on what a good rate looks like,” she said.

“Just one 0.25 percentage point cut from the RBA could see the average new customer variable rate, which is currently sitting at 6.24 per cent, drop below the six per cent mark for the first time since August 2023, while the lowest variable rate – excluding intro rates – could drop to 5.5 per cent.

“The stage is set for what will hopefully be, a much easier year ahead for borrowers struggling under the weight of higher interest rates.”