October Cash Rate Preview: Will the RBA go 25 or 50 basis points?

This remains the consensus across most major bank economists, with another 50 basis point increase anticipated to lift the cash rate to 2.85%.

If forecasts are correct, the 275 basis points of tightening to the cash rate will see it reach its highest print since May 2013, when the rate reached 2.75%. 

Following May's decision to lift the cash rate for the first time since November 2010, RBA Governor Dr Philip Lowe signalled 25 basis points as the standard amount the RBA moves the cash rate.

The RBA has since then made four-consecutive 50 basis point increases, with the potential move on Tuesday being the fifth.  

Westpac Chief Economist Bill Evans expects the RBA to lift the cash rate by 50 basis points.

“In light of the rise in global rates, it seems sensible to push the cash rate to 2.85% in October, taking it comfortably above the neutral benchmark before scaling back the pace of rate increases,” Mr Evans said. 

“Rate hikes are expected to continue out to February 2023 as the December inflation report is likely to show consumer prices lifting strong in the December quarter.” 

CommBank economists lie at odds with other major banks, anticipating the RBA to slow the pace of tightening and lifting the cash rate by 25 basis points, taking the rate to 2.60%. 

AMP Chief Economist Shane Oliver said the RBA should scale back to a 25 basis point increase at its October meeting, but it’s starting to feel like another 0.50%.

“A 0.40% hike might be a nice compromise,” Mr Oliver said.

Monthly inflation figures 'will not' impact RBA's October decision 

With the ABS releasing monthly inflation figures as a further guide to inflation in the economy, Reserve Bank Deputy Governor Michelle Bullock said the figures won’t have monetary policy implications for October given they do not account for the full basket of goods.

"What I would say is that our forecasts for inflation are to peak at about 7.75% to 8.0% towards the end and early into next year, so those are the numbers we’re currently working with," Ms Bullock said.

CommBank economists Gareth Aird and Stephen Wu said the data is likely to be welcomed by the RBA behind closed doors, having come in below expectations.

"The RBA’s expectation for inflation to peak at 7.75% to 8% implies quarterly increases of 1.8% in CPI over the next two quarters," the economists said. 

Eyes will now turn to ABS data released across the next few months as the fuel excise has now returned in full. 

"Petrol price moves have an immediate impact on budgets and are often seen as a bellwether for wider inflation," Westpac Chief Economist Bill Evans said.

See Also: When will interest rate rises stop?

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Provider	Base interest rate	Max interest rate	Total interest earned	Introductory Term	Minimum Amount	Maximum Amount	Account Keeping Fees	Min. Monthly Deposit	Min. Opening Deposit	Linked account required	ATM Access	EFTPOS Facility	as ofMay 8, 2024
	4.40%p.a.	Intro rate for 4 monthsthen 4.40% p.a. 5.75%p.a.	$533	4	$0	$250,000	0	0	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
FEATURED	High Interest Savings Account (< $250k) Bonus rate for the first 4 months from account opening No account keeping fees No minimum balance
FEATURED High Interest Savings Account (< $250k) Bonus rate for the first 4 months from account opening No account keeping fees No minimum balance More details
	4.75%p.a.	Intro rate for 4 monthsthen 4.75% p.a. 5.35%p.a.	$518	4	$0	$249,999	0	0	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
FEATURED	Savings Account (Amounts < $250k) A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking No withdrawal notice periods or interest rate penalties
FEATURED Savings Account (Amounts < $250k) A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking No withdrawal notice periods or interest rate penalties More details
	Bonus rate of 5.00%Conditions apply. 0.10%p.a.	5.10%p.a.	$515		$0	$250,000	0	200	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
No monthly fees	Save Account Download the App to open your account Get better visibility of your spending within App! Deposit $200 per month to activate bonus interest
No monthly fees Save Account Download the App to open your account Get better visibility of your spending within App! Deposit $200 per month to activate bonus interest More details
	Bonus rate of 5.00%Conditions apply. 0.55%p.a.	5.55%p.a.	$561		$0	$100,000	0	2000	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	HomeME Savings Account ($0 - $100,000)
HomeME Savings Account ($0 - $100,000) More details
	Bonus rate of 5.40%Conditions apply. 0.10%p.a.	5.50%p.a.	$556		$1	$25,000	0	200	1	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Growth Saver ($1 - $25k)
Growth Saver ($1 - $25k) More details
	Bonus rate of 5.45%Conditions apply. 0.05%p.a.	5.50%p.a.	$556		$0	$50,000	0	1000	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
For customers aged 14-35 years	Future Saver Account ( < $50k)
For customers aged 14-35 years Future Saver Account ( < $50k) More details
	Bonus rate of 4.85%Conditions apply. 0.50%p.a.	5.35%p.a.	$541		$1	$50,000	0	500	1	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Goal Saver Maximum Age - 24
Goal Saver Maximum Age - 24 More details
	Bonus rate of 5.30%Conditions apply. 0.05%p.a.	5.35%p.a.	$541		$0	$250,000	0	1000	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Boost Saver
Boost Saver More details
	Bonus rate of 4.95%Conditions apply. 0.30%p.a.	5.25%p.a.	$531		$0	$100,000	0	0.01	1	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Reward Saver Account (31 years +) ($0-$100k)
Reward Saver Account (31 years +) ($0-$100k) More details
	Bonus rate of 5.24%Conditions apply. 0.01%p.a.	5.25%p.a.	$531		$0	$99,999	0	100	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Bonus Saver Account (Amounts < $100k)
Bonus Saver Account (Amounts < $100k) More details
	–	5.25%p.a.	$531		$0	$1,000,000	0	20	1	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Reward Saver Kick Start (Amounts ≤ $1m)
Reward Saver Kick Start (Amounts ≤ $1m) More details
	Bonus rate of 3.20%Conditions apply. 2.00%p.a.	5.20%p.a.	$526		$0	$30,000	0	0.01	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Life (< 30 years) (Monthly deposit)
Life (< 30 years) (Monthly deposit) More details
	2.35%p.a.	Intro rate for 5 monthsthen 2.35% p.a. 5.10%p.a.	$468	5	$0	$5,000,000	0	0	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	NetBank Saver
NetBank Saver More details
	4.90%p.a.	4.90%p.a.	$495		$0	$249,999	0	0	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	ANZ Save
ANZ Save More details
	Bonus rate of 4.95%Conditions apply. 0.55%p.a.	5.50%p.a.	$556		$0	$100,000	0	1000	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Savings Maximiser (<$100k)
Savings Maximiser (<$100k) More details
	Bonus rate of 4.95%Conditions apply. 0.10%p.a.	5.05%p.a.	$510		$1	$99,999,999	0	5	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Young Saver Account
Young Saver Account More details
	Bonus rate of 4.00%Conditions apply. 1.00%p.a.	5.00%p.a.	$505		$1	$99,999,999	0	50	1	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Save up
Save up More details
	Bonus rate of 4.20%Conditions apply. 1.20%p.a.	5.40%p.a.	$546		$0	$250,000	0	1000	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
FEATURED	Saver Account (<$250k) Earn up to 5.40% pa by depositing $1,000 in the previous month No account fees Easy access to your money
FEATURED Saver Account (<$250k) Earn up to 5.40% pa by depositing $1,000 in the previous month No account fees Easy access to your money More details
	Bonus rate of 4.99%Conditions apply. 0.01%p.a.	5.00%p.a.	$505		$0	$1,000,000	0	200	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Bonus Saver (<$1 Million)
Bonus Saver (<$1 Million) More details
	Bonus rate of 4.95%Conditions apply. 0.05%p.a.	5.00%p.a.	$505		$0	$99,999,999	0	0	0	$product[$field["value"]]	$product[$field["value"]]	$product[$field["value"]]	More details
	Smart Saver Account (Under 25)
Smart Saver Account (Under 25) More details

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Savings Account (Amounts < $250k)

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• A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
• No withdrawal notice periods or interest rate penalties

Total interest earned$518

4.75 % Base interest rate

5.35 % Max interest rate

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then

4.75%

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