{"id":7048765,"date":"2026-08-27T03:53:24","date_gmt":"2026-08-27T03:53:24","guid":{"rendered":"https:\/\/som2nypost.com\/uncategorized\/rba-warning-as-rate-hike-expected-within-weeks\/"},"modified":"2026-08-27T03:53:24","modified_gmt":"2026-08-27T03:53:24","slug":"rba-warning-as-rate-hike-expected-within-weeks","status":"publish","type":"post","link":"https:\/\/som2nypost.com\/?p=7048765","title":{"rendered":"RBA warning as rate hike expected within weeks"},"content":{"rendered":"


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The Reserve Bank of Australia is now widely anticipated to hit Australians with another interest rate increase before the end of the year, with the bank warning high demand is weighing on inflation prospects.<\/strong><\/p>\n

Just when it looked like the RBA\u2019s next move would be a rate cut, hotter-than-expected inflation in July<\/a> has sparked widespread concern<\/a> that hikes are well and truly back in the picture.<\/p>\n

New data on Wednesday revealed the Consumer Price Index (CPI) rose 3.5% for the 12 months to July, taking it to the lowest level since the start of the Iran War in February.<\/p>\n

While positive at first glance, the figure is skewed by the run off of electricity rebates and changes to fuel cost relief and is higher than the 3.3% economists had expected.<\/p>\n

Trimmed mean inflation, which strips out the most volatile month-to-month prices, is relied on more heavily by the RBA for rate decisions and paints a grimmer picture.<\/p>\n

It remains unchanged at 3.6% for a third month in a row, rather than having passed a clear peak as expected by the RBA in its forecasts earlier this year.<\/p>\n

Concern that higher inflation may be becoming entrenched in Australia\u2019s lacklustre economy is likely to push the bank to act quickly.<\/p>\n

RBA governor Michele Bullock has reiterated in recent weeks that the door remains open for more hikes<\/a>, adding long term high inflation will not be accepted and the board will look to act<\/a> if upside risks materialise.<\/p>\n

Three of Australia\u2019s largest four home loan lenders have now changed their forecasts for interest rates off the back of Wednesday\u2019s inflation data.<\/p>\n

It\u2019s unwelcome news for borrowers, with a standard rate hike adding around $120 per month to minimum repayments <\/a>on a $750,000 mortgage.<\/p>\n

ANZ and National Australia Bank now expect the cash rate to go up as soon as September, while Commonwealth Bank has predicted a rate hike for November.<\/p>\n

Despite this, CBA head of Australian economics Belinda Allen warned the bank was not ruling out an additional hike beforehand.<\/p>\n

\u201cOur previous call for the\u00a0RBA\u00a0to remain on hold this year was based on the view that inflation would continue to ease as growth slowed,\u201d she added.<\/p>\n

\u201cThe evidence has grown that tighter monetary policy is needed in the Australian economy.\u201d<\/p>\n

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CBA head of Australian economics Belinda Allen says there could be two rate hikes by Christmas. Picture: Supplied<\/p>\n<\/div>\n

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Deutsche Bank and UBS are among other lenders expecting imminent rate hikes in what has been a whiplash few weeks for borrowers that has also seen several lenders slash variable offerings. \u00a0<\/p>\n

Deloitte Access Economics partner Stephen Smith yesterday labelled the inflation findings \u201ca hot mess\u201d, warning the RBA \u201ccannot ignore persistently strong inflation\u201d.<\/p>\n

Housing costs are continuing to be a large driver of price gains, coming in as the top contributor to CPI over July, thanks in large part to rising costs associated with new dwellings.<\/p>\n

The figure does not include changes to home prices, instead including the cost of building a new home, changes in rent prices, and fluctuations in the cost of basic utilities.<\/p>\n

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Housing was the largest contributor to inflation in July. Picture: Getty<\/p>\n<\/div>\n

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\u201cNew dwellings prices rose 5.7% in the 12 months to July as builders passed on higher costs for materials and labour,\u201d Australian Bureau of Statistics head of price statistics Rachael McCririck said.<\/p>\n

Another rate hike could mark a grim milestone for the nation, with a regular 0.25 percentage point increase pushing the cash rate to its highest level in 15 years.<\/p>\n

\u201cGiven the acute focus on inflation in recent commentary, to not\u00a0hike\u00a0by the November meeting would be a surprise even if data continues to show a slowing economy,\u201d Ms Allen said.<\/p>\n

Growing expectations for a rate hike in the next few months have also coincided with a fresh look into how the RBA tries to understand inflation.<\/p>\n

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The Reserve Bank has said it will not hesitate to rase interest rates again if it deems it necessary. Picture: Hu Jingchen\/Xinhua<\/p>\n<\/div>\n

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In its latest bulletin on Thursday, the bank said it was scenario testing how wages, rent, import costs, taxes and rent prices were pulling through to increased costs for the general public.<\/p>\n

The property market was central, with the bank noting dwelling rents had made a \u201csizeable and sustained contribution\u201d to inflation since 2022.<\/p>\n

\u201cIt reflects the lagged effects of tight conditions in rental markets, with housing demand rising,\u201d it read. \u201cThe recent inflationary episode has coincided with a period of excess demand in the economy.\u201d<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

The Reserve Bank of Australia is now widely anticipated to hit Australians with another interest rate increase before the end of the year, with the bank warning high demand is weighing on inflation prospects. Just when it looked like the RBA\u2019s next move would be a rate cut, hotter-than-expected inflation in July has sparked widespread […]<\/p>\n","protected":false},"author":1,"featured_media":7048767,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[116001,2,211445,167940,88,122088],"tags":[17276,8878,1485,43954,18529,4036],"dealstore":[],"offerexpiration":[],"class_list":["post-7048765","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying","category-featured","category-interest-rate-news","category-interest-rates","category-news","category-selling","tag-expected","tag-hike","tag-rate","tag-rba","tag-warning","tag-weeks"],"yoast_head":"\nRBA warning as rate hike expected within weeks - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/som2nypost.com\/?p=7048765\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RBA warning as rate hike expected within weeks - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"The Reserve Bank of Australia is now widely anticipated to hit Australians with another interest rate increase before the end of the year, with the bank warning high demand is weighing on inflation prospects. 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