All big four Australian banks forecast rate hike

• All four major Australian banks now expect the central bank to raise interest rates in September.
• Financial markets have priced in a 93% probability of a rate increase ahead of the decision.
• Escalating Middle East tension and rising oil prices are driving the renewed inflation concerns.

Commonwealth Bank of Australia (ASX:CBA), Westpac (ASX:WBC), Australia and New Zealand Banking Group (ASX:ANZ), and National Australia Bank (ASX:NAB) now all expect the Reserve Bank of Australia to increase the cash rate this month.

The unanimous projection marks a sharp shift after ANZ, Westpac, and CBA updated their forecasts to join NAB in expecting a September increase.

“The ongoing escalation of the conflict in the Middle East and the tendency of the RBA to view the resultant increase in oil prices as much more of an inflationary shock than a growth shock suggests that a single 25-basis point rate hike in November, after the quarterly consumer price index data are released, is no longer the most likely outcome,” said ANZ Head of Australian Economics Adam Boyton and Senior Rates Strategist Jack Chambers.

The revised forecasts follow ANZ updating its outlook to project back-to-back interest rate hikes in both September and November, which ANZ stated would lift the official cash rate to 4.85%.

The updated economic predictions come as official data shows July headline consumer price index inflation remaining elevated at 3.5%.

The Reserve Bank of Australia has already raised the official cash rate three times in 2026, bringing the benchmark lending rate to 4.35%.

Central bank officials have stated that interest rate cuts will not be considered until national inflation falls back within the target range of 2% to 3%.