RBA Rate Hike Expected Next Week: CBA Economists Shift Outlook

CBA economists are now predicting that the Reserve Bank of Australia will increase interest rates next week. Head of Australian Economics Belinda Allen explained that a combination of higher oil prices, stronger-than-expected economic data, and increasingly hawkish signals from the RBA have shifted their expectations.

The bank's team now expects the cash rate to be lifted by 25 basis points to 4.60% at its September meeting. This is an earlier move than previously anticipated, with CBA initially forecasting a rate hike in November once the full quarterly CPI confirmed inflation risks.

Allan noted that these factors have changed their outlook on interest rates, but did not elaborate further on what led to this change of heart.