Australian households brace for possible fifth interest-rate rise ahead of inflation data

The Australian Bureau of Statistics is set to release September inflation data at 11:30 a.m., which many expect to exceed the Reserve Bank of Australia’s (RBA) forecasts and influence the central bank’s decision at its November meeting. CommSec equity market strategist James Gruber said markets anticipate headline inflation of about 4.2% for the year and 1.2% for the quarter, driven largely by higher fuel costs, while the trimmed-mean measure is projected at 3.6% annually and 1% quarterly. Gruber added that the market is pricing roughly a 62% chance of a rate increase on the November meeting day.

Among the major banks, ANZ and Westpac forecast a cash-rate rise to 4.85%, whereas the Commonwealth Bank and NAB expect the rate to remain unchanged. ANZ economist Madeleine Dunk projected trimmed-mean inflation to rise to 1% in the quarter, up from 0.8% previously. Canstar data insights director Sally Tindall noted that a repeat of the 3.6% trimmed-mean figure would mark the tenth consecutive month that core inflation has not fallen.

If the RBA raises rates by 25 basis points, a borrower with a $600,000 mortgage could see monthly repayments increase by about $92, adding roughly $456 per month after five hikes, according to Tindall.

RBA Deputy Governor Andrew Hauser warned that inflation could be materially higher than the August outlook, citing risks such as geopolitical tensions, AI-related price pressures and domestic supply constraints. He said the board faces “hard choices” between tightening policy to curb inflation and preserving labour-market conditions. Assistant Governor Dr. Sarah Hunter emphasized that while higher rates are the most effective tool to reduce inflation, they also cause hardship for households struggling with mortgage payments.