RBA Widely Expected to Raise Cash Rate to 4.6% Amid Persistent Inflation

Markets and Australia's four major banks broadly anticipate the Reserve Bank of Australia will raise its cash rate by 25 basis points from 4.35% to 4.60%, reaching its highest level since 2011. The expected move marks the central bank's fourth rate increase of 2026 as it battles persistent inflation, with July trimmed mean inflation at 3.6%. While traders price in roughly 41 basis points of tightening by year-end, emerging headwinds include August unemployment rising to 4.6%, contracting household spending, and home values declining over 4% from their peak.