This comes despite weaker than expected monthly inflation, coming in at 6.9% down from the September quarter print of 7.3%. 

Another cash rate increase Tuesday would mark the eighth consecutive lift, taking the rate to 3.10% - a decade high.

The other option on the table outlined by major bank economists is for the RBA to pause the cash rate, leaving the rate at 2.85% and allowing the data to ‘catch-up’ until the board next meets in February. 

AMP Chief Economist Shane Oliver said while it is possible for the RBA to pause rate hikes given signs of a peak in inflation, the risks of a ‘price-wages’ spiral on the back of a very still labor market remains a cause for concern.

“The increasing evidence of a peak in inflation pressures and a slowdown in the economy adds to our confidence that we are getting near the peak in the cash rate,” Dr Oliver said. 

“The debate on Tuesday at the RBA board meeting is likely to be between a pause or a 0.25% hike.

“Maybe the RBA should just hike by 0.15%, taking the cash rate to a neat 3%.”

Westpac Chief Economist Bill Evans took a leap of faith in November, making the call for the RBA to hike by 0.50%, which did not prevail. 

This month Westpac's Chief Economist is sticking to the status quo, forecasting the RBA to raise the cash rate by 25 basis points to 3.10%.

“The decision to raise the cash rate by only 25 basis points in November came as a surprise to Westpac, given the September quarter inflation report printed a 1.8% rise for the quarter,” Mr Evans said. 

“Having unexpectedly pivoted from increments of 50 basis points to 25 basis points in October, moving back to 50 would not have been a ‘consistent’ action.” 

Recent weakness in retail sales figures from October is expected to weigh into calculations, yet ANZ economists urge the RBA to not overplay the weakness in this data with household consumption forecast to grow this quarter by 0.7% in a switch away from goods.

Further, CommBank Senior Economist Kristina Clifton pointed to the fact that monthly retail trade prints will get interesting over the next few months thanks to the November Black Friday-Cyber Monday sales activity.

"It may take until the data for early next year is released before we get a true picture of the spending pulse from the ABS retail trade data over this period,” Ms Clifton said. 

ANZ economists forecast 25 basis point increase

ANZ Economists anticipate the RBA to lift the cash rate another 25 basis points in December. 

ANZ Head of Australian Economics David Plank noted the RBA Governor’s comments at the Bank of Thailand’s 80th anniversary conference point to another 25 basis point hike. 

“RBA Governor Lowe said that ‘we need to demonstrate to the public that inflation will come back down. If we don’t pass this first test, then the next are going to be even harder’,” Mr Plank said. 

“To not tighten by 25 basis points on Tuesday would seem at odds with that commitment given the drop in unemployment to 3.4% and the acceleration in wages growth.”

CommBank economists back in 25 basis point increase

CommBank Head of Australian Economics Gareth Aird noted that despite an expected 25 basis point hike, the RBA’s rhetoric continues to evolve. 

“The notion of pausing in the tightening cycle has now appeared in every piece of RBA communication since the Governor’s remarks at the Reserve Bank Board Dinner on 1 November,” Mr AIrd said. 

“We expect the discussion will be between raising the cash rate by 25 basis points of leaving policy on hold.”

Mr Aird said the RBA is still flying blind to a degree given the last few rate hikes have not yet hit the cash flow of home borrowers. 

NAB economists remain on trend, forecasting 25 basis point increase

NAB economist Taylor Nugent echoed the comments of AMP’s Shane Oliver, detailing the RBA has held out that wage and inflation dynamics in Australia are different to other countries.

“While that was true over the initial reopening phase, recent data is challenging the assessment that the backdrop is fundamentally more benign,” Mr Nugent said.

“With such risks, we think it is too early for the RBA to consider pausing rate increases and we expect the RBA to continue in a string of 25 basis point increases, lifting rates in December, February and March.”


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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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