ANZ becomes latest of Big Four banks to cancel forecast of RBA rate cut in 2026Stephen JohnsonThe NightlyTue, 2 December 2025 8:46AMCommentsCommentsEmail Stephen Johnson
ANZ has become the latest of the Big Four banks to cancel forecasts of an interest rate cut from the Reserve Bank of Australia in 2026.
The bank’s head of Australian economics Adam Boyton said an inflation spike in October meant it was no longer predicting relief in February next year.
“We no longer see one final rate cut from the RBA in the first half of 2026, given recent inflation pressures,” he said.
“With growth around potential, the activity case for further easing is also less clear.
“With today’s forecast change — removing the final 25 basis point easing — we now expect the cash rate to remain at 3.6 per cent for an extended period.”
The update on Tuesday means the ANZ bank joins the Commonwealth Bank and NAB in no longer forecasting relief in 2026.
Westpac is now the only Big Four bank forecasting the Reserve Bank next year easing the existing 3.6 per cent cash rate.
Inflation soared by 3.8 per cent in the year ended October 31, which marked the worst set of consumer price pressures since June 2024.
The consumer price index climbed from an upwardly revised 3.6 per cent annual pace in September to be even further above the RBA’s 2-3 per cent target.
This followed a 37.1 per cent increase in electricity prices over the year, off the back of an end to Queensland’s $1000 annual electricity rebates on June 30 and Western Australia axing its equivalent $400 program.
Underlying inflation, without volatile price items, was also on the high side at 3.3 per cent. The trimmed mean had risen from 3.2 per cent.
Unemployment in September rose to a four-year high of 4.5 per cent before easing back to 4.3 per cent in October.
“The rise in the unemployment rate this year and conflicting signals across leading indicators of demand make it difficult to see a case for a 2026 rate hike,” Mr Boyton said.
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