Three banks now expect a Reserve Bank rate rise on 29 September

By Elias Thorne · 2026-09-05

National Australia Bank, Deutsche Bank and UBS are all forecasting a Reserve Bank rate rise at its meeting on 29 September. That would take the cash rate to 4.6 per cent.^[1] UBS changed its call on Friday, citing "too high" inflation.^[1]

UBS wrote in the note that moved its forecast: "Globally, the growth backdrop looks even more positive, led by an AI/trade cycle boom, which is now also seeing global inflation pressure, & raising the risk of global central banks also hiking rates."^[1] The Australian dollar climbed back above 72 US cents on Friday and finished at 72.04. The ASX 200 slipped 0.16 per cent to 9,005 points.^[1]

What moved the forecasts

The national accounts on Wednesday showed the economy grew 0.4 per cent in the June quarter and 2.1 per cent over the year. The Reserve Bank's August forecast was 1.9 per cent.^[4] Inflation was 3.5 per cent in July. The 10-year government bond yield reached 5.19 per cent on Wednesday, its highest level since 2011.^[3][5] Mining profits rose 6.8 per cent in the quarter while non-mining profits fell 1.1 per cent.^[6]

Economist Saul Eslake said Australia's inflation rate had been inside the Reserve Bank's 2 to 3 per cent target on only two occasions in almost five years. The July figure, he said, had increased the odds of a rise at the September meeting.^[2][3] "Economists immediately strengthened their predictions of another interest rate rise," ABC business editor Ian Verrender wrote on Friday of the reaction to the growth figures.^[3]

The Treasurer will not say

ABC News Breakfast asked Jim Chalmers on Friday whether the economy needed at least one more rate rise to stamp out inflation. "I'm not going to give free advice to the independent Reserve Bank," he said. "I think it's self-evident that the interest rate rises in the system already are putting additional pressure on people." He added: "I don't think that's an especially controversial view to hold."^[1]

"You can see in the national accounts, even, released in the last couple of days, the impact of those rate rises which are already in the system and will play out in the months ahead," Chalmers said. He said there were good reasons Treasurers of either political persuasion did not give free advice to the Reserve Bank.^[1]

What else moved on Friday

Brent crude held at US$95.52 a barrel, gold slipped 0.22 per cent to US$4,463 an ounce and Bitcoin fell 0.65 per cent to US$80,731.^[1] Wall Street had closed higher overnight, with the Dow up 1.2 per cent, the S&P 500 up 1.06 per cent and the Nasdaq up 1.4 per cent. US futures pointed to a modestly positive open.^[1]

The Reserve Bank board's decision is due on Tuesday 29 September. Bushletter argued on Wednesday that one growth print, driven by mining and an inventory revaluation, was no case for a rise. Three banks now disagree.^[4]

Elias Thorne

Elias Thorne writes about interest rates, the bond market and the Reserve Bank. He is interested in what monetary policy actually does to household budgets, and in the long stretches of economic history that tend to repeat.