A leading Australian investment bank, Macquarie, has warned that the Reserve Bank of Australia (RBA) is preparing the ground for another interest rate rise, as inflation remains persistently above target. This comes despite the central bank holding rates steady at its last meeting, with analysts pointing to increasingly hawkish language from RBA officials as evidence that policymakers are far from finished tightening. The warning matters because it signals further pain ahead for mortgage holders already grappling with a series of rate rises this year, at a time when the RBA is under pressure to demonstrate its commitment to controlling prices.

Money markets are now pricing in around a 76 per cent chance of a fourth rate rise this year at this month's meeting, with a fifth hike considered more than 90 per cent likely by March. For a homeowner with a $600,000 mortgage over 30 years, two further quarter-point rises would add roughly $195 a month, or about $2,340 a year, to repayments, on top of some $284 a month in extra costs already caused by the RBA's three previous hikes in 2026. Economists, including AMP's Shane Oliver, cited persistent inflation, elevated oil, insurance and rental costs, and concerns over the RBA's credibility as reasons a hike is likely, while cautioning that further increases beyond one could risk tipping indebted households into serious financial strain and triggering a sharper economic downturn.