Three Major Banks Now Forecasting a Rate Rise in 2026

Three of Australia's four major banks are forecasting a 25-basis-point rate hike before year's end, with NAB expecting September and CBA and ANZ tipping November.

Three of Australia's four major banks are now forecasting at least one more interest rate rise before the end of 2026 — a dramatic reversal from just months ago, when the conversation was shifting toward potential cuts. For anyone with a variable-rate home loan, the message is clear: the pressure may not be over yet.

The shift followed the release of July's monthly Consumer Price Index (CPI) data, which showed inflation easing but still running well above the Reserve Bank of Australia's target band of 2% to 3%. Headline CPI for the 12 months to July came in at 3.5%, down from 3.8% in June, while trimmed mean inflation — the measure the RBA watches most closely — held steady at 3.6%, unchanged from the prior month.

That was enough for three of the Big Four to change tack.

ANZ, NAB and CBA Are All Now Calling a Hike

Following the release of the July CPI print, ANZ was the first major bank to revise its outlook, quickly calling for a 25-basis-point increase. National Australia Bank (NAB) and Commonwealth Bank of Australia (CBA) followed suit shortly after. Australian Broker reports that all three now expect the RBA to raise the cash rate by 25 basis points — but they differ on when.

NAB is anticipating a hike as early as the September meeting, scheduled for 28 and 29 September 2026. CBA and ANZ are instead forecasting the move in November, giving the RBA more time to absorb additional economic data before acting.

"We have a fairly high conviction that the RBA will hike at some point this year. The question is whether it will be in September or November," Harry Ottley, an economist at CBA, told Australian Broker. "We favor the November meeting because it'll give the RBA a bit more time to get more inflation data, including the quarterly inflation data, which they put more focus on."

Ottley pointed to the underlying stickiness in price pressures as the key concern. "If you look at, for example, the trimmed mean monthly figure for the July number, that was 0.5% in just one month. That implies that the quarterly number is going to be fairly high. So it looks like there's still a fair bit of broad-based inflationary pressure around. The economy might be proving a little bit more resilient than we had expected."

NAB Chief Economist Sally Auld was equally direct. "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," Auld said. "The risk is biased towards an additional hike in November, especially if activity data shows resilience in coming months."

Where the Cash Rate Stands — and Where It Could Go

The RBA has already raised the official cash rate three times in 2026, bringing it to its current level of 4.35%. RBA Governor Michele Bullock left little room for ambiguity after the August board meeting, saying the bank would consider raising rates again "if that is what is required to bring inflation down in a timely way."

RBA Deputy Governor Andrew Hauser reinforced that message at a separate event in Brisbane, warning that the conflict in the Middle East, investments in artificial intelligence and weak productivity growth in Australia are all potential sources of sustained inflationary pressure.

At the time of the Australian Broker report, futures markets were pricing in around a 40% chance of a rate hike at the September meeting, rising to approximately 97% for a November move if the RBA holds in September. That's a significant repricing of risk, and it has immediate implications for borrowers shopping for fixed rates or weighing whether to lock in now.

For variable-rate borrowers, even a single 25-basis-point increase means higher monthly repayments. Now is a sensible time to use our refinance savings calculator to work out whether switching to a more competitive rate could offset the impact — and to browse home loans available for refinancing to see what the market is currently offering.

Westpac Holds Its Ground — But Markets Have Moved

One major bank is swimming against the tide. Westpac remains the outlier, forecasting that the RBA will keep the cash rate on hold through the rest of 2026. The bank expects the next move to be a cut, but not until mid-2027.

Westpac Senior Economist Justin Smirk argued that July's CPI data doesn't necessarily indicate a worsening inflation trend. "The July CPI did come in hotter than expected and while the risk of a November rate hike has increased, we still expect the RBA to remain on hold this year," Smirk said.

Smirk noted that new housing and rental costs came in broadly as expected. The upside surprises were concentrated in categories such as cars, household goods, restaurants and domestic travel — areas that may reflect timing or seasonal factors rather than a structural acceleration in underlying prices.

That said, three of the four majors now disagree with Westpac's read. And with futures markets already pricing in a near-certain November hike if September is skipped, borrowers would be wise to plan for the possibility of a higher rate environment through at least the first half of 2027.

What Borrowers Should Do Before the September Decision

Whether the next hike lands in September or November — or whether Westpac is right and there is none at all — the practical advice for borrowers is the same: review whether your current loan is still competitive before the RBA meets.

Variable-rate borrowers who haven't compared their rate in the past 12 months could be paying well above what the market is currently offering, even before any future increase takes effect. Refinancing to a lower base rate now means any subsequent hike hits from a lower starting point.

Use our borrowing power calculator to stress-test different rate scenarios against your income and expenses, and explore cheapest available home loans to see how your current rate stacks up. If you're on a fixed rate, it's worth checking when your term expires — many fixed periods locked in during 2021 and 2022 at historically low rates are rolling onto variable rates this year, often at rates significantly higher than the market's current competitive offerings.

The RBA's September meeting on 28 and 29 September will be the next major date for mortgage holders to watch. Getting ahead of that decision — rather than waiting to see what happens — puts you in a stronger negotiating position regardless of the outcome.

For the full analysis, see the original report at Australian Broker.

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