Economists from ANZ, CommBank, and Westpac are expecting the Reserve Bank of Australia (RBA) to boost the cash rate further over the coming months, with another 50bps increase either in July or August.

While the three banks differ in their opinions on which month the RBA is likely to repeat the 50bps increase, their projections all point to a 1.6% cash rate by 02 August.

Here are the different scenarios projected by the economists from each major bank:


  • July Forecast: +25bps to 1.1%
  • August Forecast: +50bps to 1.6%

ANZ economist David Plank said the RBA would likely repeat the 50bps rate hike in August, as it would be able to take into consideration the inflation rate and other employment figures over the second quarter of the year.

“One or two more rate hikes over the remainder of 2022 are possible if the data remain “resilient” despite all the various pressures facing households,” he said.

“The RBA acknowledges the uncertainty stemming from cost-of-living pressures on household budgets and the impact of rising interest rates and falling house prices,” he said.


  • July Forecast: +50bps to 1.35%
  • August Forecast: +25bps to 1.6%

CBA head of Australian economics Gareth Aird said the RBA’s recent decision is a clear indication of its intention to drive inflation back to target.

“Our forecast profile is of course based on what we think the RBA will deliver and not what we believe the RBA should do,” he said.

Based on CBA’s forecasts, 25bps hikes are also expected in September and November, which would bring the cash rate at 2.10% by the end of the year.

“Higher rates will take some time to put downward pressure on inflation because there is a lag between changes in monetary policy and the impact on consumer prices — indeed, upcoming inflation data over the next two quarters will be very strong despite our expectations for an aggressive tightening cycle by the RBA,” Mr Aird said.

Mr Aird said there is some evidence that some parts of the economy are already cooling. For instance, CBA’s credit and debit card data shows that spending momentum has already slowed.

“Consumer sentiment sits well below average levels and national home prices are now falling — the demand for credit has also moderated as evidenced by the big fall in new home lending in April,” he said.

“The economy is now likely to slow quite materially as we approach the end of 2022.”


  • July Forecast: +50bps to 1.35%
  • August Forecast: +25bps to 1.6%

Westpac economist Bill Evans said a slowdown in the pace of hikes in August can be expected but a response will still be necessary to the likely upside surprise on inflation for the June quarter.

“With the cash rate having reached 160 basis points by August it will be prudent for the Bank to pause,” he said.

“Our analysis of the leverage in household balance sheets points to a cash rate of around 160 basis points being ‘in the neighbourhood’ of neutral – better to pause at that point to assess the impact on household consumption, house prices, the labour market, consumer and business confidence, and the response of wages growth to these inflation pressures.”

However, Mr Evans still expects further increases of 25bps around November and December, in response to inflation over the September quarter. This would bring the cash rate to 2.1% by the end of 2022.

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