RBA governor Michele Bullock runs the risk of losing credibility if they do not act on inflation. Picture: NewsWire / Nikki Short
A bombshell survey reveals nearly half of the nation’s leading economists warn a brutal double rate hike will smash households before Christmas.
Fresh figures released Friday by comparison site Finder showed a crushing 90 per cent of finance experts and economists predicted the Reserve Bank would vote to lift the official cash rate by 25 basis points to 4.6 per cent at its crucial board meeting.
Shockingly, nearly half of the expert panel now tip a second follow-up rate hike before the end of the year, which would drive the cash rate to a punishing 4.85 per cent – the highest level since the peak of the 2008 global financial crisis.
18 lenders have already hiked interest rates so far this month. Picture: Brendan Radke
The last RBA board meeting left the cash rate unchanged in August, but things have escalated dramatically since then, with the market now pricing in a double rate hike by early next year too – with a 90 per cent expectation of an increase to 4.6 per cent come Tuesday.
This comes as Canstar warned 18 lenders have quietly jacked up home loan rates already in September, with Macquarie Bank dropping the latest bombshell on Thursday, lifting fixed rates for the second time in three weeks – following similar rate increases from sixth-placed ING as well as the big four CBA, Westpac, NAB and ANZ.
The next RBA Board meeting and official cash rate announcement will be on the 29th September 2026.
Finder’s analysis warned that an average Aussie home loan of $736,259 would see monthly repayments jump by $427 a month compared to January if the RBA hikes on Tuesday – and if experts are right about two hikes by Christmas, average borrowers will kick off 2027 paying an astonishing $542 extra every single month compared to the same time this year.
That’s a massive $6,509 annual hit to average homeowner household budgets compared to 12 months prior.
Mortgage repayment increases on average home loan of $736,259. Source: Finder
AMP chief economist Dr Shane Oliver warned the RBA’s credibility is on the line if it fails to act now.
“While the RBA is meeting its full employment objective, this is not the case for its inflation objective, with underlying inflation running well above target,” Dr Oliver said.
“After more than five years of having inflation above target, the RBA risks further losing its credibility if it decides to extend its wait-and-see approach.”
Pathfinder Consulting’s Peter Boehm warned the Reserve Bank’s hand is being forced into pushing the nation closer to economic fallout.
“There is no alternative but to increase rates at the expense of pushing up the unemployment rate and possibly pushing the economy into recession,” he said.
AMP chief economist Dr Shane Oliver. Picture: NewsWire / John Appleyard
QUT adjunct professor Noel Whittaker slammed the expected RBA move, warning mortgage holders were being unfairly punished for global cost drivers beyond their control.
“It will be a fairly pointless exercise,” Mr Whittaker warned. “Higher rates will hit people with mortgages hard, while doing little to address the global forces now driving inflation.”
Finder home loans expert Richard Whitten urged desperate borrowers to take action immediately before Tuesday’s decision.
“Households got a short break over winter, but the data has turned and the experts think the RBA has no choice but to move again,” Mr Whitten said.
“If your rate already starts with a ‘6’ or a ‘7’, it’s worth picking up the phone. A quick call to your lender, or a switch to a more competitive loan, could save you more than the RBA is about to cost you.”
Finder home loans expert Richard Whitten.
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