- CBA joins ANZ interest rate forecast
Australian homeowners have been warned to brace for another mortgage hit after two major banks abandoned their interest rate forecasts and predicted the Reserve Bank will hike rates again before Christmas.
The Commonwealth Bank on Thursday joined ANZ in forecasting a 0.25 percentage point cash rate increase in November, lifting the official rate to 4.60 per cent.
If the prediction proves correct, it would push the cash rate to its highest level since October 2011 and pile fresh pressure on borrowers struggling with soaring living costs.
The surprise forecast marks a sharp turnaround after all four major banks had previously expected the RBA's next move would be a rate cut, although not until 2027.
A quarter-percentage-point increase would add about $91 a month to repayments on a $600,000 mortgage with 25 years remaining, according to Canstar analysis.
For homeowners who have endured three rate hikes so far this year, monthly repayments would be roughly $363 higher than they were at the start of 2026.
The call came after new inflation figures dampened hopes that price pressures were easing quickly enough for the central bank to begin cutting rates.
Australian Bureau of Statistics data released on Wednesday showed headline inflation slowed to 3.5 per cent in the year to July, down from 3.8 per cent in June.
Trimmed mean inflation, the Reserve Bank's preferred measure of underlying price pressures, was unchanged at 3.6 per cent for a second consecutive month.
ANZ revised its forecast immediately after the inflation figures were released, while NAB confirmed its own cash rate outlook is now under review.
Canstar data insights director Sally Tindall said the latest inflation report had forced economists and the market to rapidly reassess the outlook for interest rates.
'The economic narrative has taken a U-turn in the space of just a couple of days,' she said.
'The central bank has warned the risk lies with a hike, and based on Wednesday's inflation figures, ANZ has now put a date on that risk.
'A 0.25 hike might not sound like much, but for those with a $1million mortgage, the impact is significant, adding an extra $152 per month to repayments.
'That's an extra $605 these borrowers would have to stump up every month compared to what they were paying at the start of the year.'
Ms Tindall said headline inflation had fallen mainly because of a spike in electricity and travel costs a year earlier, rather than clear evidence that inflation was now under control.
'Core inflation provides a clearer picture of the troubles in the figures,' she said.
'In the last eight rounds of monthly data the annual figure has not gone down. Not once.'
The forecasts were further bolstered by the Reserve Bank's August board meeting minutes, which highlighted the possibility of further policy tightening if inflation risks intensified.
The minutes noted that 'several members judged that it was quite possible that the upside risks to the inflation forecast would crystallise, requiring some further tightening'.
AMP chief economist Shane Oliver said Wednesday's inflation figures were 'way too high' and reinforced the case for another interest rate hike.
He argued the drop in annual inflation painted a misleading picture because it was mostly driven by a notably high inflation reading from a year earlier dropping out of the calculation, rather than a real easing in price pressures.
'Annual CPI inflation only fell because of the very high monthly rise a year ago dropping out of the year-on-year calculation,' Mr Oliver added.
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