All big four bank teams now forecast rate hike in November

All big four bank economic teams are now forecasting a rate hike at the next RBA meeting on 7 November, with Westpac announcing a change to their call this morning.

Both CBA and ANZ yesterday changed their forecast to a hike in November, while NAB was already predicting one.

The revisions come on the back of Wednesday’s quarterly CPI figures, that showed both headline and trimmed inflation were higher than expected, and the re-confirmation from Governor Bullock on Tuesday night that the Board would hike the cash rate if there was “material upward revision to the outlook for inflation”.

CBA, Westpac and ANZ have all made note that the decision will be “finely balanced”, with RBA staff forecasts and further data possibly giving enough evidence for the Board to pause.

What would a 13^th rate hike mean for borrowers?

For the average borrower with a $500,000 debt at the start of the hikes, another 0.25 percentage point increase would see their monthly repayments rise by $76.

Across all 13 hikes this would be a total increase of $1,210 to their monthly mortgage repayments – a 52 per cent increase.

Potential impact of a 0.25%-point hike in November on monthly mortgage repayments

Source: RateCity.com.au. Based on an owner-occupier paying principal and interest with 25 years remaining. Starting rate is the RBA avg. existing owner-occupier variable rate of 2.86% in April and assumes banks pass the hikes on in full.

RateCity.com.au research director, Sally Tindall, said: “The big four banks are now in agreement – a cash rate of 4.35 per cent is the more likely outcome of the next RBA Board meeting.”

“The last time all four bank economic teams unanimously predicted a hike at the next Board meeting was back in March 2023,” she said.

“A rate hike of 0.25 percentage points would take Australia’s cash rate to the highest level since November 2011 and put many borrowers in a tricky position.”

“While it’s astounding to think the last 12 rate hikes haven’t been enough, the Board has made it clear it will do what it takes to rein in inflation using the one blunt instrument it has.”

“Borrowers should prepare for a rate hike in November, but potentially one more in December or the New Year. Instead of dreading what could come round the corner, start planning for it, before any rate hike decision is made.

“Call up your bank and ask for a rate cut. Any reduction in your interest can offset whatever decision is made on November 7 and beyond,” she said.

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