The last holdout has folded. As Australian Broker reported, Westpac has abandoned its call for rates on hold through 2026 and now expects a hike, joining ANZ, NAB and CBA. All four majors are pointing the same direction.
The cash rate sits at 4.35%, after three RBA increases so far in 2026. The banks agree on the size of the next move, 25 basis points, but not the timing. NAB flags September; CBA and ANZ favour November. By late August, futures put a September hike at 40%, climbing to roughly 97% for November if the RBA holds in September.
What actually moved
Westpac's reasoning is worth noting because it isn't the usual inflation story. Chief Economist Luci Ellis cited a "more resilient household sector" and, more unusually, spillovers from the data centre boom, investment in tech infrastructure and renewable generation that lifts business investment and GDP, but also "limit[s] the pace of disinflation." Translation: the thing keeping growth up is also keeping the RBA cautious.
Inflation is moderating but stubborn. Headline CPI was 3.5% in the year to July, down from 3.8%. Trimmed mean held at 3.6%, still above the RBA's 2–3% band.
What it means for a business borrowing
Four banks forecasting the same direction is a signal, not a certainty, economists have been wrong in unison before. But if you carry variable-rate debt, a business overdraft, or a facility repricing soon, the forecast consensus now leans up rather than flat.
The practical read: budget on the assumption that the cost of variable borrowing does not fall this year, and may rise once more. Fixed-versus-variable maths shifts when the market prices a hike at near-certainty for November. The RBA meets 28–29 September; the next data print will do more to move rates than any bank's forecast.
We'll update the observatory as lender pricing responds.