{"id":869285,"date":"2025-08-31T00:12:10","date_gmt":"2025-08-31T05:12:10","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/08\/31\/august-could-be-the-month-your-cash-flow-gets-a-break\/"},"modified":"2025-08-31T00:12:10","modified_gmt":"2025-08-31T05:12:10","slug":"august-could-be-the-month-your-cash-flow-gets-a-break","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/08\/31\/august-could-be-the-month-your-cash-flow-gets-a-break\/","title":{"rendered":"August could be the month your cash flow gets a break"},"content":{"rendered":"
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Small business confidence may lift following CPI fall to 2.1%, with analysts saying rate cut is \u2018all but nailed on\u2019 for August meeting.<\/em><\/p>\n

Small business owners are eyeing potential cash flow relief after inflation tumbled to its lowest level in four years, with analysts now saying an interest rate cut in August is virtually certain.<\/strong><\/p>\n

The Consumer Price Index rose just 2.1 per cent annually in the June quarter, down from 2.4 per cent in March, according to Australian Bureau of Statistics data released today. The result puts headline inflation at the bottom of the Reserve Bank\u2019s 2-3 per cent target range and marks the lowest annual rate since March 2021.<\/p>\n

For small and medium enterprises grappling with elevated borrowing costs and compliance expenses, the inflation data offers hope that monetary policy relief may finally be within reach.<\/p>\n

Market ocnfidence builds for rate relief<\/h2>\n

Financial markets have responded decisively to the inflation news, with analysts saying the data removes remaining barriers to monetary easing.<\/p>\n

Josh Gilbert, Market Analyst at eToro, said the result provides the confirmation the RBA has been seeking. \u201cToday\u2019s Q2 CPI print is the confirmation the RBA has been waiting for. Headline inflation has dropped to 2.1% year-on-year, right at the bottom of the RBA\u2019s target band, and underlying inflation fell from 2.9% in the first quarter, reinforcing the disinflation narrative that\u2019s been building for months,\u201d Gilbert said.<\/p>\n

\u201cWith inflation falling faster than forecast, domestic demand soft, and the labour market weakening, it\u2019s becoming harder for the RBA to justify its current stance. After the surprise pause in July, today\u2019s data means an August rate cut is all but nailed on.\u201d<\/p>\n

Markets are now pricing a 93 per cent probability of a rate cut at the RBA\u2019s 12 August meeting, up from around 70 per cent before today\u2019s data release.<\/p>\n

SME sector awaits reprieve<\/h2>\n

The potential for lower interest rates comes as welcome news for small business owners who have faced a challenging period of elevated costs and subdued demand.<\/p>\n

Ben Thompson, CEO of Employment Hero, said the inflation result offers much-needed stability for the small business sector.<\/p>\n

\u201cWith annual inflation now at its lowest level since the March 2021 quarter, the case for a rate cut is getting harder to ignore. This is exactly the kind of sustained momentum the RBA has been waiting for, so it\u2019ll be interesting to see whether they now consider the evidence strong enough to justify a move,\u201d Thompson said.<\/p>\n

\u201cFor consumers and small businesses, this drop in inflation offers a much-needed sense of relief and stability. While wages and compliance costs have just increased, easing inflation gives business owners hope that interest rates will follow, freeing up cash flow and helping them stay resilient in a tough environment.\u201d<\/p>\n

Labour market remains fragmented<\/h2>\n

However, employment data suggests small business hiring remains subdued despite the improving inflation outlook.<\/p>\n

Martin Herbst, CEO at JobAdder, highlighted persistent challenges in the labour market that extend beyond interest rate policy.<\/p>\n

\u201cFalling inflation puts the RBA in a stronger position to cut rates, but that alone won\u2019t fix the labour market. This week\u2019s ABS figures show that job mobility has dropped to 7.3%, the lowest in over a decade, and underemployment remains at 6%. That\u2019s 1.3 million Australians who want more hours but aren\u2019t getting them,\u201d Herbst said.<\/p>\n

\u201cWe\u2019re seeing workers stay put, not necessarily because they\u2019re satisfied, but because changing jobs still feels uncertain in the current job market. Recruiters will need to work harder to build trust with candidates and help employers regain confidence to invest in their labour force ahead of the next growth cycle. The opportunities are out there, and it\u2019s a great time to find talent, but we need to meet the market where it is.\u201d<\/p>\n

Thompson\u2019s data corroborates these employment concerns, with implications for small business growth prospects.<\/p>\n

\u201cEmployment Hero data shows both employment and hours worked stayed relatively stagnant in June, so the labour market remains fragile. But if today\u2019s CPI result gives the RBA the confidence to act, we could see a lift in consumer sentiment, more hiring, and a stronger rebound in economic activity,\u201d Thompson said.<\/p>\n

The CPI data revealed some relief in housing-related expenses that directly impact small business operations, particularly for those in retail and hospitality sectors dealing with rental costs.<\/p>\n

Michelle Marquardt, ABS head of prices statistics, said quarterly housing inflation eased to 1.2 per cent from 1.7 per cent in the previous quarter, while rental costs moderated from 1.2 per cent to 1.0 per cent.<\/p>\n

Housing costs have been a significant burden for small businesses, particularly those requiring physical premises, making any moderation in this category particularly relevant for SME planning.<\/p>\n

Property esctor anticipates relief<\/h2>\n

Oliver Hume Chief Economist Matt Bell said the inflation result should provide certainty for businesses and households alike.<\/p>\n

\u201cToday\u2019s CPI release is great news for mortgage holders and home buyers eagerly waiting for the next cut in interest rates. Many households were bitterly disappointed with the decision to leave rates on hold on 8th July, with the RBA deciding to wait for today\u2019s inflation release before moving again,\u201d Bell said.<\/p>\n

\u201cMarkets were pricing in 92% chance of a cut at the next meeting on 12th August. Today\u2019s data pretty much locks that cut in.\u201d<\/p>\n

Bell noted that underlying inflation, the RBA\u2019s preferred measure, now sits at 2.7 per cent annually, \u201csafely within the RBA\u2019s 2-3% target band for the second consecutive quarter.\u201d<\/p>\n

Of particular relevance to service-based small businesses, services inflation continued its downward trajectory, falling to 3.3 per cent annually from 3.7 per cent in March.<\/p>\n

\u201cThis is the lowest Services annual inflation in three years and continues to reflect easing inflation for rents and insurance,\u201d Marquardt said.<\/p>\n

The moderation in services inflation suggests that cost pressures facing many small businesses in sectors such as professional services, hospitality, and retail may be beginning to ease.<\/p>\n

Cautious optimism for policy path<\/h2>\n

While analysts expect rate relief to begin in August, they caution that the RBA\u2019s approach is likely to remain measured.<\/p>\n

Gilbert warned against expectations of aggressive easing, noting that following a potential August cut, \u201cwe may only see one further cut until the end of the year.\u201d<\/p>\n

\u201cNonetheless, rates are coming down and that\u2019s a win for equity markets and mortgage holders,\u201d he said.<\/p>\n

The inflation data comes as small businesses continue to navigate a complex operating environment characterised by elevated costs, subdued consumer spending, and ongoing labour market challenges, making any monetary policy relief particularly significant for sector confidence and investment decisions.<\/p>\n

Keep up to date with our stories on\u00a0LinkedIn<\/a>,\u00a0Twitter<\/a>,\u00a0Facebook<\/a>\u00a0and\u00a0Instagram<\/a>.<\/p>\n<\/div>\n

Read More<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Small business confidence may lift following CPI fall to 2.1%, with analysts saying rate cut is \u2018all but nailed on\u2019 for August meeting. Small business owners are eyeing potential cash flow relief after inflation tumbled to its lowest level in four years, with analysts now saying an interest rate cut in August is virtually certain.<\/p>\n","protected":false},"author":1,"featured_media":869286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36859,547],"tags":[8076,8764],"class_list":{"0":"post-869285","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-august","8":"category-month","9":"tag-august","10":"tag-month"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/869285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=869285"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/869285\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/869286"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=869285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=869285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=869285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}