Business · Economy · 4 hrs ago
Australian borrowers face another possible rate rise as inflation stays high
The Reserve Bank of Australia is expected to raise interest rates when it meets next week, though it has not yet made its decision.
Westpac forecasts a quarter-point increase, while market futures indicated an 80% chance of a rise to 4.85%.
The bank points to annual inflation rising to 4.3% in September, above the RBA’s 2% to 3% target.
The RBA has already raised rates four times in 2026, and nearly 32% of Australian households are considered at risk of mortgage stress, according to Roy Morgan.
Higher rates can help slow price rises, but they also increase loan costs for households and businesses.
Westpac says further rises are not currently its main forecast, but future decisions will depend on inflation and energy prices; it expects rate cuts to begin in mid-to-late 2027.
Westpac expects the Reserve Bank of Australia to raise its cash rate by 0.25 percentage points at its November meeting.
The bank cites inflation of 4.3% in September, above the RBA’s 2% to 3% target range.
Westpac says further increases may not be needed after November, though the risk of another rise has grown.
Australian households are facing mortgage pressure after four rate hikes in 2026, according to figures cited by Yahoo Finance Australia.
- Who
- Westpac expects the Reserve Bank of Australia to raise interest rates.
- What
- Westpac forecasts a 0.25 percentage-point increase in the cash rate.
- When
- At the RBA’s November meeting, scheduled for the following week.
- Where
- Australia.
- Why
- Westpac says inflation remains above the RBA’s target range and recent data strengthened the case for a hike.
Mortgage borrowers and critics of further rate rises
Westpac and supporters of tighter monetary policy
Impact on households
Mortgage borrowers and critics of further rate rises
Rachelle Kroon said mortgage holders were being asked to do a lot of the work to curb inflation and questioned how higher mortgage costs would make fuel cheaper.
Westpac and supporters of tighter monetary policy
Westpac expects a rate rise because inflation is above target and risks becoming embedded in expectations and pricing decisions.
Need for higher rates
Mortgage borrowers and critics of further rate rises
Kroon highlighted the pressure on Australian families from rising mortgage repayments.
Westpac and supporters of tighter monetary policy
Westpac says further policy tightening is needed, while noting that future decisions will depend on inflation and other economic conditions.
Annual inflation was 4.3%, up from 4% in August, while underlying inflation was 3.6%.
Motley Fool AU reported that Westpac expected a 0.25 percentage-point rise at the RBA’s November meeting.
Yahoo Finance Australia reported on mortgage stress and the pressure facing Australian households amid expected rate rises.
The RBA is due to meet to decide on interest rates.
- Westpac forecast
- 0.25 percentage-point increase
- September annual inflation
- 4.3%
- RBA inflation target
- 2% to 3%
- Mortgage-stress estimate
- Nearly 32% of households considered at risk
- People facing mortgage stress
- About 1.75 million
- RBA rate hikes in 2026
- Four
3 sources
What people are saying
We reaffirm our expectation that the RBA Monetary Policy Board will again increase the cash rate at the November meeting.
How does making mortgages more expensive, make fuel cheaper?
But remember, only 33 per cent of Australians have a mortgage, and we're asking them to do an awful lot of heavy lifting.