Big Four Forecasts
Published: September 7, 2026 | Updated: September 7, 2026 | Category: Business | By Mahesh
Three of Australia's four largest banks now expect the Reserve Bank of Australia to raise interest rates before the end of 2026, a sharp reversal from the more settled outlook that prevailed just weeks earlier. The shift traces directly to a single data release: the Australian Bureau of Statistics reported on August 26 that the Consumer Price Index rose 3.5% over the twelve months to July, down from 3.8% in June, according to the ABS's own media release.[1] On its own, a falling headline number would normally support the case for holding rates steady. What actually moved bank forecasts was the number sitting next to it: trimmed mean inflation, the RBA's own preferred measure of underlying price pressure, held completely unchanged at 3.6%, still well above the central bank's 2 to 3% target band.
The RBA's own August 12 statement, released after its Monetary Policy Board's most recent meeting, had explicitly flagged this exact scenario as a trigger for further action. According to the RBA's own media release announcing its decision to hold the cash rate at 4.35%, the Board said financial conditions had tightened following three earlier rate increases in 2026 and that the economy appeared to be slowing broadly as expected, but added that inflation remained too high and that it could raise the cash rate again "if upside risks to inflation materialise."[2] The July CPI print, released two weeks later, is precisely the kind of upside risk that sentence was written to describe.
How the Big Four Split, and Why the Split Itself Is the Story
ANZ was the first of the major banks to move, revising its forecast to a November hike within hours of the CPI release, according to reporting compiled by Aussie Home Loans, drawing on each bank's own published research notes.[3] NAB followed the next day and became the first major bank to specifically nominate September, rather than a later meeting, as the likely timing for a move, pointing directly to the Board's own repeated signalling that it would act on upside inflation risks. CBA switched its own call to a November hike on August 27, stating that the broad-based upside surprise in the July data had crossed the threshold the bank considers necessary to trigger further tightening, while flagging September itself as a live but secondary risk. Westpac remains the sole holdout among the big four, maintaining that rates will stay on hold for the remainder of 2026, a position the bank bases on softer labour market and wage data it believes gives the RBA room to look through the CPI surprise rather than react to it.
That the four largest banks in the country, all working from the same public ABS release, have arrived at three distinct forecasts, September, November, and no hike at all, says something important about how genuinely contested this decision is inside financial markets right now. This is not a case of one clear signal being read differently by outlier analysts. It reflects real disagreement among mainstream, well-resourced economics teams about how the RBA itself will weigh a specific, ambiguous data point: a headline number improving while the central bank's own preferred underlying measure refuses to move.
What the ABS Data Actually Shows Underneath the Headline Number
The category-level detail inside the ABS release explains why this specific inflation print has proven harder for the RBA to read than a simple headline-versus-target comparison would suggest. Housing was the largest single contributor to annual inflation, rising 5.0% over the year to July, with new dwelling prices climbing 5.7%, according to the ABS data. Food and non-alcoholic beverages rose 3.2% over the same period. Transport inflation accelerated sharply, jumping to 1.6% in July from just 0.1% in June, a shift the ABS attributed specifically to higher world oil prices and the partial unwinding of federal fuel excise relief measures, with automotive fuel prices alone rising 7.5% during the month.
That last detail matters for how the RBA is likely to interpret the print internally. A price spike driven by a specific, identifiable policy change, the winding down of a temporary fuel excise measure, and global oil price movements is a different kind of inflation signal than a broad-based acceleration across unrelated categories of consumer spending. Central banks generally distinguish between inflation driven by temporary, policy-linked or external price shocks and inflation reflecting sustained, embedded demand pressure throughout the domestic economy, and the July data contains elements of both, which is a meaningful part of why professional forecasters have not converged on a single reading of what it means for the Board's next move.
What Happens to Borrowers If the Split Resolves Toward a Hike
The practical stakes of this forecasting disagreement are concrete and immediate for anyone holding a variable-rate mortgage. A quarter-percentage-point increase, the size every hawkish forecast currently anticipates, would add roughly $91 a month in repayments on a $600,000 variable loan if passed through in full by lenders, according to the same Aussie Home Loans analysis. That said, the RBA cash rate and what individual borrowers actually pay are not mechanically linked. Canstar reported on August 10 that 49 lenders on its database were offering at least one owner-occupier variable home loan rate below 6%, up from 38 at the start of June, and that 31 lenders had cut new-customer variable rates since the beginning of June, even while the RBA held its own cash rate steady throughout that period. That gap between the official cash rate and the actual rates borrowers are being offered reflects genuine competitive pressure among lenders, meaning a September RBA decision, whichever direction it goes, will not automatically or uniformly translate into the same change at every bank.
Why the RBA's Own Timing Works Against a Clean Read
One structural detail makes the September 29 decision genuinely harder to forecast than a typical meeting: the July inflation figures released on August 26 are the last full quarterly-equivalent CPI data the Board will have before it meets. The ABS is scheduled to release August's monthly inflation indicator on September 30, the day immediately after the RBA's decision, meaning the Board will be voting without the benefit of the most current available inflation read, a timing quirk built into Australia's data release calendar rather than any deliberate policy choice. That gap forces the RBA to weigh a five-week-old data point more heavily than it otherwise might, and is part of why NAB, ANZ and CBA's forecasts diverge specifically on timing, September versus November, rather than on the underlying direction of travel, all three now agree a hike is coming at some point before the year ends.
What to Watch Next
Beyond the inflation data already published, the RBA's own published calendar shows a Monetary Policy Board meeting spanning September 28 to 29, with the formal media release scheduled for 2:30pm AEST on the 29th, followed by a media conference an hour later, according to the RBA's own events schedule.[4] Labour market data and household spending indicators released between now and that date will factor into the Board's final decision alongside the inflation print already in hand. Given how evenly split professional forecasters currently are, any labour market weakness between now and late September would likely tip sentiment toward Westpac's hold scenario, while stronger-than-expected employment or spending data would reinforce the case NAB, ANZ and CBA have already built for a hike.
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Article by Depth Grid News Desk | depthgrid.in