Major bank predicts two more interest rate hikes for Australia
Australian mortgage holders could face further financial pressure, with Citi forecasting two more interest rate increases before the end of 2026.
The Reserve Bank of Australia (RBA) has kept the cash rate at 4.35% after three rate hikes earlier this year.
Citi senior economist Faraz Syed expects the cash rate to rise to 4.85%, up from its previous forecast of 4.6%. The bank has also pushed back its forecast for the next rate cut to Q4 2027.
Syed said persistent inflation, a tight labour market, weak productivity and elevated oil prices could keep price pressures high.
The outlook comes as the RBA signals growing concern about inflation. Assistant Governor Sarah Hunter said another rate increase could be considered if inflation remains above the central bank’s 2–3% target range.
Inflation rose 3.5% in the year to July, exceeding economists’ expectations. Housing costs, food prices and expensive fuel were among the key contributors.
The RBA’s next board meeting is scheduled for September 28–29, with markets closely watching for its next move.
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Source : 9 News
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