Big Four Banks Predict Rate Hike as Inflation Rises

The Reserve Bank of Australia (RBA) may increase interest rates this year, according to three major banks. Commonwealth, ANZ, and NAB have all revised their predictions, citing a higher-than-expected inflation rate of 3.5% for the year to July.

This is despite the RBA keeping the cash rate at 4.35% in its August meeting. However, the recent inflation data suggests that the central bank may need to act sooner rather than later to keep prices under control.

According to Commonwealth, the RBA's willingness to hike rates if necessary during the August board meeting was a clear indicator of what is to come. The bank expects a 25% rate hike in November to 4.6%, with an earlier hike possible in September.