The Reserve Bank of Australia (RBA) hiked the official cash rate by another 25 basis points in November in a highly anticipated, Melbourne Cup-day decision.

That sees the rate at 4.35% – the highest it’s been since November 2011. 

The latest hike comes after the consumer price index (CPI) (how Australia's measures inflation) rose 1.2% over the September quarter.

The jump surprised both the big four banks and the RBA, the latter of which once forecasted a 0.9% lift.

Today also saw the RBA update its forecasts for inflation and unemployment. 

The central bank now expects inflation to be at 3.5% by the end of next year and return to the top end of its 2% to 3% target by the end of 2025. 

The unemployment rate, on the other hand, is forecast to be 4.25% by late 2025 – down from previous predictions of 4.5%.

Prior to the RBA’s announcement, economists at each of the big four banks had already tipped a cash rate hike on the back of last month's surprise inflation read.

This page will detail reactions across the big-four banks following the RBA's November cash rate hike - check back here regularly for the latest information.

See how the banks reacted following June’s announcement – the last time the RBA hiked. 

Commonwealth Bank - up 0.25% 

Despite being listed first, CommBank came in last place when it came to responding to the RBA's Melbourne Cup day rate hike. 

The back revealed it will pass the hike on in full to home loan borrowers and savers on Thursday afternoon.

Those holding a variable home loan with the bank will see their interest rate increase 25 basis points from 17 November.

That same day, the total interest rate available on its GoalSaver savings account will increase 25 basis points to 4.90% p.a.

CommBank's Youthsaver account will also see its total potential interest rate bolstered by 25 basis points, this time to 5.00% p.a.

Both accounts demand depositors grow their balance each month in order to realise the maximum interest rate.

Finally, the biggest of the big four banks will increase the introductory rate available for new customers opening a NetBank Saver account by 35 basis points to a total of 5.10% p.a. 

That rate will revert to 2.35% p.a.,15 basis points higher than it currently is, after the first five months.

“To support our savings customers, we have increased rates on our savings products, some by more than the RBA cash rate change," group executive of retail banking Angus Sullivan said.

“We know Australians are facing increasing cost of living pressures and for some households this is more difficult than for others.

"Customers who are struggling are top of mind for us and helping customers when they need it is our priority.

“Making that first point of contact is an important step in creating a tailored solution based on the needs and circumstances of each individual."

Commbank head of Australian economics Gareth Aird pointed out that the RBA’s hawkishness appears to have “been watered down a little” this month. 

The big bank had previously predicted the RBA would bolster its forecast for inflation and drop its predictions for unemployment.

“It might be the case that the RBA’s forecasters expect underutilisation to rise by more than is implied by looking at the unemployment rate alone,” Mr Aird said.

CommBank doesn’t foresee any more rate hikes from the RBA in this cycle.

NAB - up 0.25%

NAB was the first big four bank to respond to November's rate hike, revealing it will pass the rate increase on in full to those holding variable rate home loans and bonus interest savings accounts with the bank.

Its standard variable home loan interest rate and its NAB Reward Saver bonus interest rate will increase by 25 basis points (with eligible savers set to realise a total rate of to 5.00% p.a.) from 17 November.

“While most of our customers are in good shape, there may be some people who are more concerned about the first rate rise since mid-year which is why it’s crucial to reach out to your bank as soon as you can," NAB group executive for personal banking Rachel Slade said.

“Customers continue to build and flex their ‘budgeting muscle’ and they’re responding to cost of living pressures by reducing their spending on dining out, fuel, and leisure travel.

“We’re seeing more customers using budgeting tools than ever before – an important sign that more Australians are closely engaged with their finances.”

When it comes to predictions of the future of the cash rate, NAB differs from its big bank peers.

NAB group chief economist Alan Oster believes we’ll see one more cash rate hike, most likely in February. 

He predicts the cash rate will rise to 4.6% (another 25 basis points) when the central bank’s board meets for its first meeting of 2024. 

“Recent communication from [RBA Governor Michele Bullock] has made clear the board was already at the limit of its tolerance for inflation remaining above target,” Mr Oster said.

“Given the revisions to the outlook, we expect the board to form the view that a single 25 basis point adjustment to rates is not enough to mitigate the risks on inflation.”

Westpac - up 0.25%

Westpac was hot on the heels of NAB and ANZ in reacting to the RBA's hike on Wednesday, passing on the 25 basis point increase in full to both home loan borrowers and savers.

From 21 November, the bank's variable home loan rates will increase by 25 basis points.

A few days prior, on 17 November, holders of Westpac Life savings accounts will see their total offered interest rate bolstered to 5.00% p.a.

Right now, a Westpac Life account offers a 2.00% p.a. base rate and a 4.75% p.a. total rate, available to customers growing their balance each month.

The bank will also boost the introductory interest rate offered to new customers opening a Westpac eSaver account to 5.00% p.a. for the first five months.

"In making interest rate decisions, we consider a range of factors and work to balance the needs of both borrowers and depositors," Westpac chief executive, consumer Jason Yetton said.

“We know people are feeling the impact of the higher cost of living and adjusting their spending to manage their household budget.

“While customers are cutting back in response to rising expenses, our overall hardship numbers remain low and more than 70% of customers are ahead on their mortgage repayments.

“Customers are proactively contacting us to discuss their options and we would encourage others feeling financial pressure to contact us sooner rather than later to speak to our team about what support is available."

Westpac chief economist Luci Ellis, who, until October, acted as assistant governor at the RBA, also predicted the November hike ahead of time.

The former RBA insider said the central bank has a “low tolerance for upside surprises” and noted the RBA’s “considerably rewritten statement”. 

“The language of the statement shows that the board is increasingly concerned that inflation will not decline on the trajectory it is aiming for, and so it has decided to take out more insurance to achieve the desired result,” Ms Ellis said. 

While more clarity will be provided when the central bank releases its November statement on monetary policy on Friday, she said the unemployment forecast “seems like a nod to the signs of unexpected resilience in parts of the real economy”.

Ms Ellis doesn’t expect the RBA board will hike again at its December meeting, but believes all meetings in 2024 could feasibly bring further rate changes.

ANZ - up 0.25%

ANZ was second to respond to the central bank's decision, announcing its intent to pass the hike on in full to borrowers and savers on Wednesday afternoon. 

The bank will increase its variable home loan interest rates by 25 basis points on 17 November. 

ANZ will also increase the interest rate on the ANZ Plus Save account by 25 basis points, with balances under $250,000 eligible to receive a base rate of 4.90% p.a. from 16 November.

Balances of more than $250,000 will also see a higher interest rate of 3.75% p.a. from that same date.

"We know rate changes impact customers and their household budgets differently," ANZ group executive of Australia retail Maile Carnegie said.

"Over the past 18 months, we’ve been proactively reaching out to thousands of home loan customers each month, to check in with them about their circumstances and loan arrangements.

“Our team is trained to support customers, and we encourage anyone who would like to better understand the options available to them to connect with us.”

The smallest of the big four banks hasn’t yet locked in a prediction of more rate hikes. 

“We have not seen enough data to add a further rate hike to our forecasts yet, but will be watching the data closely in the coming weeks,” ANZ senior economist Adelaide Timbrell said.

On the bank’s watch list are the meeting minutes from the RBA board’s November meeting, its upcoming statement on monetary policy, as well as quarterly wage growth data and October’s labour market data. 


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Image by CBA, ANZ, NAB & Westpac

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