Australian Economists Split on an August RBA Rate Hike as Inflation Holds

Economists are divided over the Reserve Bank of Australia's next move after it left the cash rate unchanged at 4.35% in June, with attention now turning to its August 11 meeting. Inflation remains a challenge: the annual Consumer Price Index was running at 4.0% in the year to May, well above the central bank's 2-3% target band, kept elevated in part by higher energy costs tied to the Middle East conflict. Surveys show a split among forecasters. One widely cited poll found that around 55% of economists expect at least one further rate increase in 2026, and among those, most view August as the most likely timing, while several major banks expect the RBA to hold through the rest of the year. Westpac has continued to forecast further tightening, whereas Commonwealth Bank, NAB and ANZ lean toward no change. Analysts note the decision will hinge heavily on the June-quarter inflation figures due before the meeting. With rate cuts widely seen as unlikely until 2027, borrowers face the prospect of elevated mortgage costs persisting, and any further hike would add pressure to household repayments.