NAB Predicts Earlier Cash Rate Hike Amid Higher Inflation

National Australia Bank (ASX:NAB) has broken ranks with its peers by predicting an earlier cash rate hike from the Reserve Bank of Australia. The lender's economics team pointed to inflation running above policymakers' expectations, making business lending conditions a key focus.

The central bank is set to make its next decision at the end of September, with National Australia Bank's call being one of the most hawkish among Australian major lenders. While all major lenders now expect tightening before the year-end, they differ on timing, with some predicting an earlier move.

According to the lender, inflation data showed stubbornness, with the underlying measure remaining above the target band despite a headline easing in July. Elevated energy costs are contributing to this stickiness, making it less likely for inflation to soften without policy intervention.