Australian homeowners have been warned they could face a fourth interest rate rise before the end of September, as economists at Macquarie Bank and NAB predict the Reserve Bank of Australia (RBA) will lift the cash rate at its board meeting on 28–29 September. Senior RBA officials, including assistant governor Sarah Hunter and deputy governor Andrew Hauser, have signalled that tackling persistently high inflation remains the priority, even at the cost of further squeezing mortgage holders, meaning households could see borrowing costs climb to their highest level in 15 years.

Inflation ran above the RBA's forecasts in July, with headline inflation at 3.5 per cent and trimmed mean inflation at 3.6 per cent, both above the bank's 2–3 per cent target band it hopes to reach by the end of next year. Consumer confidence has already taken a hit, with sentiment among mortgage holders falling 14 per cent in the past month compared with just 0.9 per cent among renters, while the broader consumer sentiment index dropped 5.2 per cent to 84.4. Despite forecasts of a deepening housing downturn, including HSBC's prediction of a 13 per cent peak-to-trough fall in house prices, only 32 per cent of consumers expect prices to fall over the next year, against 42 per cent expecting a rise.