Beyond Tuesday: How Many More Times Will the RBA Strike in 2026

The Reserve Bank will raise the cash rate once more in 2026, at its 2–3 November meeting, and a second increase on 7–8 December is a real possibility rather than the expected outcome (Board Meeting Schedules). The reason is that underlying inflation has sat near 3.5 per cent since the start of the year (Mc Gov 2026 09 29). Only one fresh inflation report separates the two meetings and it arrives after the first of them, which is why December is the weaker of the two chances (Aug 2026).

The Bank has shown which way it is facing, and by how much: it weighed only holding against a quarter-point rise, so nothing larger is available (Mc Gov 2026 09 29). It lifted the cash rate to 4.60 per cent at its 28–29 September meeting, and the decision was unanimous. The statement carrying it promised to act "including increasing the cash rate target further if needed" (Mr 26 27). The Governor repeated the point at her press conference: rates will rise again "if that's what's needed to get inflation down".

The inflation that forced the decision has not improved since. Headline consumer prices rose 4.0 per cent in the 12 months to August, up from 3.5 per cent in July (Aug 2026). Trimmed mean inflation — which sets aside each month's most extreme price moves to show the underlying trend — was 3.6 per cent, unchanged from July. That is above the 2 to 3 per cent range the Bank aims at (RBA). Services prices rose 3.7 per cent, and non-tradables, the things that cannot be shipped in from overseas, rose 4.5 per cent.

Year-ended trimmed mean inflation, Australia, Sep 2025 – Jun 2026 (RBA)

Two of the largest annual increases were in prices the Bank cannot reach. Electricity rose 13.2 per cent over the year and automotive fuel 13.5 per cent (Aug 2026). Fuel alone jumped 14.8 per cent in August, as world oil prices climbed and the last of the federal fuel excise relief ran out. Neither responds much to interest rates, so the Bank has to slow the rest of the economy to offset them.

The Bank's own forecasts assume the problem outlasts this year. Trimmed mean inflation stays above 3 per cent until mid-2027 and reaches 2.5 per cent only in early 2028 (RBA). The quarterly rate of underlying inflation is expected to stay high for the rest of 2026. The three risks the Bank named in August — Middle East conflict, its pass-through into consumer prices, and the global boom in artificial intelligence investment — had all moved by September.

Whether one more rise is enough comes down to a single judgement. The Governor described the real interest rate — the cash rate after inflation is subtracted — as 1.5 per cent, and asked whether that is enough to bring inflation back down (Mc Gov 2026 09 29). Rate changes take 12, perhaps 18, months to work through fully, so the increases already made are still arriving. Stop too early and the restraint already delivered turns out to have been too little.

The calendar makes November the likely date. The September inflation figures are published on 28 October, ahead of the 2–3 November meeting, so the Board will see them before it decides (Aug 2026). November also brings a full forecasting round, with the Statement on Monetary Policy published beside the decision (RBA). Westpac IQ called a November rise the base case, with a low bar absent a lasting resolution of the Middle East conflict or another event that significantly lowers energy-related costs in Australia (RBA Decision 29 September 2026). The same note put the bar for anything beyond November much higher, given the cumulative rise in rates and an easing labour market.

December stands on weaker ground because the October inflation report arrives on 25 November, after the November decision and before the December one (Aug 2026). The case for stopping keeps building behind it. Unemployment has risen from 3.5 per cent to 4.6 per cent over the past couple of years, in the Governor's account (Mc Gov 2026 09 29). The August forecasts had unemployment reaching 4.5 per cent by December, and Westpac IQ noted the rate is already running above that (RBA Decision 29 September 2026).

The count would change on any of three things. A September inflation report on 28 October showing underlying inflation easing from 3.6 per cent would remove the evidence a November rise rests on (Aug 2026). The Governor has already set out the alternative in plain terms: if the restraint already in place is enough, "maybe there doesn't need to be any more interest rate rises" (Mc Gov 2026 09 29). And a lasting resolution of the Middle East conflict, by pushing energy costs down, would remove the condition Westpac IQ attached to its November call (RBA Decision 29 September 2026).

Nothing here is financial, legal or investment advice. Every figure is published by its named source and carries the date it was published; figures may since have changed.