The direction of travel just reversed. As Australian Broker reported, all four major banks now expect the Reserve Bank to *raise* the cash rate at its 28–29 September meeting, CBA and ANZ both forecasting a 25-basis-point move to 4.6%, with a further November lift on the table depending on inflation.
That's a notable shift. For most of the past year the conversation was about when cuts would arrive. The banks are now pricing the opposite.
What the data underneath it says
CommBank's Household Spending Insights report has August spending up just 0.1% for the month, with gains in five of twelve categories cancelled out by falls in the other five. Transport led, partly on a 3.4% jump at petrol stations after the fuel excise cut was removed. Essentials spending is now outpacing discretionary, 4.8% versus 3.3% over the year, which is the pattern of households trimming, not expanding.
Consumer confidence eased too, with the ANZ-Roy Morgan survey down 1.9 points to 72 and inflation expectations ticking up to 6.1%.
What it changes for a business borrower
Serviceability is the pressure point. Lenders assess your capacity to repay against the current rate plus a buffer, so an expected upward move nudges the whole calculation. If the cash rate lands at 4.6% in September and the buffer sits on top, the amount a given cash flow can support shrinks, even before your actual rate changes.
Existing variable facilities would see repayments move with the cash rate if a hike lands. Fixed exposures are unaffected until they roll. Nothing is locked in until the RBA decides, and a forecast is not a decision.
If you're modelling a purchase, refinance, or new facility, it's worth running the numbers at a higher assumed rate rather than today's. Not because we're telling you to move, because the buffer already assumes you can.