RBA Interest Rate Hike Expected Next Week: CBA Economists

CBA's Australian Economics team has revised its forecast for the Reserve Bank of Australia (RBA) to increase the cash rate by 25 basis points next Tuesday. This move is expected to bring the cash rate to 4.60%. According to Belinda Allen, Head of Australian Economics at CBA, a combination of higher oil prices, stronger-than-expected economic data, and increasingly hawkish signals from the RBA has shifted the balance towards an earlier move.

The previous call was for a rate hike in November once the full quarterly CPI confirmed the materialization of upside risks to inflation. However, with current economic indicators pointing to a more aggressive monetary policy stance, the RBA is likely to act sooner rather than later.