RBA Cash Rate Hike Predictions Revised Amid Higher Inflation Figures

Australia's major banks have adjusted their forecasts in response to higher-than-expected inflation figures, predicting a fourth cash rate rise may be imminent by the end of 2026.

The Reserve Bank of Australia (RBA) had previously been expected to maintain its stable cash rate adjustments throughout the remainder of 2026. However, with Consumer Price Index (CPI) rising 3.5% in the 12 months to July 2026, and trimmed mean inflation remaining steady at 3.6%, major banks such as Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), and Australia and New Zealand Banking Group (ANZ) have revised their predictions.

NAB has made the largest adjustment to its forecasts, anticipating a 25-ppt rise in the cash rate at the RBA's next meeting in September. CBA and ANZ also expect a hike in November. In contrast, Westpac does not anticipate any adjustments for the remainder of 2026.

CommBank senior economist Trent Saunders stated that the July figures provided 'less reassurance that underlying inflation is continuing to ease.' The data showed that new dwelling prices rose 5.7% over the past year due to higher costs for materials and labor, contributing significantly to annual inflation.