Three Big Banks Now Tip RBA Rate Hike Before Year's End

ANZ, NAB and CBA have all reversed their outlooks after July inflation data showed underlying price pressure is proving stubborn.

Three of the Big Four banks have overhauled their RBA forecasts in the space of 24 hours, with ANZ, CBA and NAB all now expecting another cash rate increase before the end of 2026. The reversal came swiftly after Wednesday's July consumer price index print, which showed headline inflation easing but underlying price pressures refusing to budge. Only Westpac is holding its ground — and whether that contrarian stance proves right will be revealed at the RBA's next meeting on 28 and 29 September.

The cash rate has already risen three times in 2026 to its current level of 4.35 per cent. At the August meeting the Board held steady, but RBA Governor Michele Bullock signalled clearly that further tightening remained possible, telling markets the Bank would lift rates again if that is what is required to bring inflation down in a timely way. Deputy Governor Andrew Hauser subsequently reiterated that warning in Brisbane, citing the conflict in the Middle East, investment in artificial intelligence and weak domestic productivity growth as potential drivers of further inflationary pressure.

What the July Inflation Data Showed

The Australian Bureau of Statistics reported that headline CPI eased to 3.5 per cent in the 12 months to July, down from 3.8 per cent in June. That directional move looks encouraging. But the RBA's preferred measure, trimmed mean inflation, held flat at 3.6 per cent for the second consecutive month — well above the Bank's 2–3 per cent target band and unmoved despite three rate increases this year.

Housing remained the single largest contributor to the annual inflation read, rising 5 per cent over the year according to the ABS. NAB noted the result put inflation on track to exceed the RBA's own forecast for the September quarter — a threshold the Bank had already flagged it would not accept without response. Interbank futures moved swiftly, with MPA Australia reporting markets pricing approximately 78 per cent odds of a rate hike by November, up sharply from under even odds before the data was released.

How the Major Banks Have Responded

**NAB** moved fastest, announcing on Thursday 27 August that it now expects the RBA to lift the cash rate by 25 basis points at its September meeting, taking the benchmark from 4.35 per cent to 4.60 per cent. Chief economist Sally Auld said the data had crossed the bar: 'July CPI data showed inflation running hotter than the RBA expected in early August, and the RBA has repeatedly signalled in recent weeks that the Monetary Policy Board would act if upside risks to inflation were realised.' NAB's revised note also highlighted that the August Board meeting minutes had referenced 'pre-emption,' indicating very limited tolerance for further inflation overshooting. NAB has not ruled out a second move in November.

**CBA** revised its position the same day. Economist Belinda Allen described the July surprise as 'broader than simply a reversal of unusually weak fuel and travel outcomes in June,' and announced a forecast for a 25-basis-point November hike to 4.60 per cent, with September remaining a live risk. CBA economist Harry Ottley explained the bank's reasoning: the quarterly CPI — which the RBA weights more heavily — should reinforce the picture of sticky inflation and give the Board clearer cause to act. 'We favor the November meeting because it'll give the RBA a bit more time to get more inflation data,' Ottley told Australian Broker.

**ANZ** was first to move among the four majors, shifting its call to a 25-basis-point November hike to 4.60 per cent. Economists Adam Boyton and Jack Chambers said upside risks to inflation were 'closer to crystallising,' though they judged the July data not yet sufficient to make September the base case.

**Westpac** remains the lone holdout. Senior economist Justin Smirk argues the upside surprise was concentrated in durable goods such as motor vehicles and household items, and in consumer services like restaurants and domestic travel — categories he links partly to timing and seasonal factors rather than a genuine broadening of price pressure. Westpac has also pointed to wages and labour market data that both came in softer than the RBA forecast, giving the central bank room to hold. Westpac made a similar contrarian call before the August meeting and got it right. Whether that record holds will be known on 29 September.

What This Means for Mortgage Holders

If NAB's September call proves correct, borrowers on variable rates face another increase in repayments from October, when banks typically pass on RBA decisions. MPA Australia notes that on a $600,000 loan with 25 years remaining, a 25-basis-point hike adds roughly $91 per month to minimum repayments. On an $800,000 loan that figure rises to approximately $121 per month, and to $152 on a $1 million loan. Across four rate increases in 2026, the cumulative monthly increase on a $600,000 loan would reach approximately $363 — real money for households already managing elevated living costs.

For borrowers already feeling the pressure, now is a practical moment to review your position. Use our repayment calculator to model the precise impact of another quarter-point rise on your specific loan, and check our cheapest home loans page to see whether a more competitive rate is currently available. If refinancing is on your mind, our refinance savings calculator can show what switching to a lower rate today might save over the remaining life of your loan — even before any further RBA moves.

Fixed-rate borrowers rolling off in the next 12 months should pay particular attention. Lenders are already pricing in the prospect of further official rate increases, so the gap between a new fixed or variable rate and your revert rate could be substantial. Speaking with a broker well before the September meeting could give you time to explore your options — refinancing typically takes two to four weeks from application to settlement.