Australia's Big Four Banks Predict Cash Rate Hike Amid Strong Inflation

Three of Australia's big four banks have revised their cash rate predictions following a stronger-than-expected inflation reading.

Commonwealth, ANZ, and NAB now forecast a hike to 4.6% in the coming months, reversing their previous calls for a hold on interest rates.

The Reserve Bank of Australia kept the cash rate at 4.35% at its August 11 meeting, but inflation for the year to July was higher than expected at 3.5%, up from June's 3.8%.

Commonwealth and ANZ both expect a hike in November, with Commonwealth noting that 'we change our call and now expect the RBA to hike the cash rate by 25 basis points in November to 4.6%'.

NAB is more optimistic, predicting an earlier September hike, stating that 'we think it unlikely that activity data between now and the September board meeting will be weak enough to deter the board from hiking'.