RBA expected to lift cash rate to its highest since 2008 on Tuesday

The Reserve Bank of Australia (RBA) is widely expected to raise interest rates for a fifth time on Tuesday 3 November 2026, taking the cash rate to its highest level since 2008, according to The Guardian. The cash rate is the RBA's benchmark interest rate. It stands at 4.60 per cent, a level set on 30 September after a quarter-point rise. In August, the board had left the rate at 4.35 per cent in a unanimous decision.

The Commonwealth Bank's economists, in a note published on 2 November, expect the cash rate to rise to 4.85 per cent and then hold steady.

The bank's head of Australian economics, Belinda Allen, forecast that real GDP, the broad measure of the economy's output, would fall to 1 per cent by mid-2027. That is down from a previous estimate of 1.8 per cent. The Commonwealth Bank also projected growth through 2027 at 1.1 per cent.

On jobs, National Australia Bank head of Australian economics Gareth Spence forecast the unemployment rate would rise from 4.7 per cent to as high as 5.4 per cent by the end of 2027. The Commonwealth Bank put its peak at 5.1 per cent by the end of 2027.

Housing is also under pressure. AMP chief economist Shane Oliver said home prices could fall by as much as 15 per cent before levelling off late in 2027, with Sydney values already down 10 per cent from their recent peak. Oliver also estimated a 45 per cent chance of recession if the RBA raised rates as expected on 3 November.

Global energy prices have moved sharply too. Brent crude, the international benchmark for oil, rose from about US$72 a barrel in early July 2026 to above US$110 in early November.

On the morning of 2 November, union leaders protested the expected rate rise outside the RBA's Sydney offices.

The RBA's August forecasts had inflation returning to its 2 to 3 per cent target band in the second half of 2027.