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RBA Rate-Hike Odds Jump to 51% After Inflation Warning
Why are RBA rate hike odds up today?
RBA rate-hike odds jumped to 51% on Wednesday after deputy governor Andrew Hauser said Australia's inflation outlook is "materially worse" than forecast, raising the chance of a rate rise on 3 November.
Key numbers
| RBA cash rate | 4.6%15-year high; 4 hikes in 2026 |
|---|---|
| November hike odds | 51%up from 22% Tuesday; one report says 40% [3] |
| Annual inflation (August) | 4.0%vs 2–3% target |
| Unemployment (September) | 4.7%five-year high |
What happened
RBA rate-hike odds jumped to 51% on Wednesday after deputy governor Andrew Hauser said Australia's inflation outlook is "materially worse" than forecast, raising the chance of a rate rise on 3 November. Hauser said businesses are starting to treat 3% to 3.5% inflation as normal, which he called "the central banker's nightmare". The Reserve Bank has already raised its main interest rate (the cash rate) four times this year, to 4.6%, the highest in 15 years. Prices rose 4% in the year to August, above the bank's 2% to 3% target, and unemployment is 4.7%.
Why it matters
The Reserve Bank of Australia (RBA) may raise interest rates again on 3 November, which would push up the cost of mortgages and other loans. Higher rates are meant to slow price rises, but they also squeeze households and can weaken hiring. Unemployment is already at a five-year high of 4.7%, so the bank is weighing stubborn prices against a softer job market.
Who this affects
- MarketmixedMedium impact
- Borrowers face higher costs, while savers could earn more.
- CompanyneutralMedium impact
- The Reserve Bank faces pressure to keep inflation expectations anchored.
- CompetitorsneutralLow impact
- Peers like the Fed and RBNZ have also raised rates.
- IndustrybearishMedium impact
- Mortgage holders and housing-linked firms face more pressure.
Australia vs United States, United Kingdom, New Zealand
| Australia (RBA)— | 4.60% | +0.25 pt | 2026-09-29 |
|---|---|---|---|
| United States (Fed)— | 3.75–4.00% | +0.25 pt | 2026-09-16 |
| United Kingdom (BoE)— | 3.75% | −0.25 pt | 2025-12-18 |
| New Zealand (RBNZ)— | 2.75% | +0.25 pt | 2026-09-02 |
As of 2026-10-21
How we got here
RBA delivers first of four 2026 hikes, lifting cash rate to 3.85%
Third hike takes cash rate to 4.35%; rates then held in July and August
RBA unanimously lifts cash rate 0.25 points to 4.6%, a 15-year high
Hauser says outlook "materially worse"; November hike odds jump to 51% from 22%
What to watch
- September and third-quarter inflation figures, due next week, will test Hauser's warningweek of 2026-10-26
- RBA board decision and Statement on Monetary Policy on Melbourne Cup day2026-11-03
Educational content only. Not investment advice.
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