Business & Finance
All Big Four Banks Now Predict Another Rate Hike, Possibly This Month
All four of Australia's major banks are forecasting a fourth interest rate hike, with overnight market movements suggesting it could arrive as soon as this month. The shift follows Westpac's reversal on Tuesday, when it joined Commonwealth Bank, NAB and ANZ in predicting higher rates before Christmas. Cash rate futures overnight priced in a 60 per cent chance of a Reserve Bank move on September 29.
Commonwealth Bank economists said Tuesday that the RBA faces a "new economic reality" of structurally higher interest rates, forecasting a hike in November "or possibly as early as late September." CBA head of Australian economics Belinda Allen said the bank now expects a final rate hike this cycle in November, taking the cash rate to 4.60 per cent, but noted the September 28-29 meeting is "live," citing recent data, shifts in RBA language, and market pricing.
Westpac chief economist Luci Ellis, who had been the sole big four economist resisting another 2026 rate rise, changed her position, setting a cash rate target of 4.60 per cent as the bank's new base case. Ellis pointed to resilient household income growth and spillover effects from the AI and data-centre investment boom as reasons for the shift. She favours a November move over September, on the expectation the RBA will wait for third-quarter CPI data, due October 28, before acting. However, she acknowledged that