Side by side, the RBA's August and November forecast tables show an outlook that has deteriorated on almost every front, from Inflation to jobs to growth.

Central bank forecasts tend to move in small steps. A tenth of a percentage point here, two tenths there. The Reserve Bank's November 2026 Statement on Monetary Policy (SMP), released at 2.30 pm AEDT on 3 November, breaks that pattern. Its headline inflation forecast for December 2026 is 4.5%. Three months earlier, in the August Statement, it was 3.6%.

Comparing the two forecast tables line by line is one of the most direct ways to understand why the Monetary Policy Board lifted the cash rate target by 25 basis points to 4.85% on the same day — and why three of its nine members still preferred to hold at 4.60%.

Headline inflation: the biggest revisions

All figures below are year-ended forecasts, November first and August in brackets.

  • December 2026: 4.5% (3.6%)
  • June 2027: 3.7% (2.8%)
  • December 2027: 2.7% (2.6%)
  • December 2028: 2.4% (2.4%)

The near-term revisions are large: 0.9 percentage points for both December 2026 and June 2027. Further out, the change shrinks to a tenth of a point at December 2027 and disappears entirely by December 2028.

That shape tells a story. The RBA has marked up the size of the current inflation burst sharply, but still expects it to unwind over time. Some of that unwinding depends on an energy assumption: the SMP assumes energy prices decline from their elevated levels, while warning they could stay high or rise if shipping and refining disruptions persist.

Underlying inflation: smaller moves, more persistent

The trimmed mean, which strips out the most extreme price changes each period, has been revised by less — but the revisions last longer.

  • December 2026: 3.6% (3.3%)
  • June 2027: 3.5% (3.0%)
  • December 2027: 2.9% (2.6%)
  • June 2028: 2.5% (2.4%)

The largest change is 0.5 percentage points at June 2027. The December 2027 forecast remains 0.3 points higher than in August. For a Central Bank aiming at the 2.5% midpoint of a 2–3% band, persistence in the underlying measure is arguably more significant than a temporary spike in the headline rate.

The comparison also highlights why the two measures need to be kept separate. The latest actual readings are monthly headline CPI of 4.3% year-ended for September 2026 and a trimmed mean of 3.7% year-ended for the September quarter. They are different measures and move for different reasons.

Jobs and growth: weaker in the out years

The other columns of the table moved too. Unemployment forecasts (November, with August in brackets):

  • December 2026: 4.7% (4.5%)
  • December 2027: 4.9% (4.7%)
  • December 2028: 5.1% (4.8%)

GDP growth forecasts tell a mixed story. Near-term growth was revised up — 2.1% (1.9%) for June 2026 and 1.6% (1.4%) for December 2026 — consistent with the decision statement's note that Business investment, including data centres, is stronger in the near term. Further out, growth was revised down: 1.3% (1.6%) for December 2027 and 1.5% (1.8%) for December 2028.

So the November outlook combines higher inflation, higher unemployment and, beyond the next year, slower growth. The decision statement said "the unemployment rate is projected to rise by more than expected in the August forecasts", and that "Higher interest rates and falls in housing prices and turnover are expected to weigh on growth".

The Interest Rate assumption is part of that picture. The November forecasts assume a cash rate averaging 4.9% in 2026/27 and 4.8% in 2027 and 2028, based on market pricing as at 28 October. These are market-based assumptions, not RBA commitments.

What changed between August and November

The SMP's own summary is direct: "Inflation in Australia remains well above target and a number of upside risks have crystallised since the August Statement."

Several of those risks had been visible in the weeks before the decision. Minutes of the 29 September meeting noted that domestic petrol and diesel prices were 13% above the August forecasts, and that "Members expressed their concern that excess Demand was greater than previously assessed." At a Citi conference on 21 October, Deputy Governor Andrew Hauser said oil was above $100 a barrel, about a third higher than the August assumption, and that the underlying productivity growth assumption had been cut from 1% to 0.7%. His summary: "The inflation outlook looks materially worse than we projected in the August report."

Governor Michele Bullock, appearing before the Senate Economics Legislation Committee on 28 October, also foreshadowed the revisions: "Inflation will therefore likely be higher than was our base case in August." She noted that "the labour market seems a little tighter than we had previously judged" and that "Household spending growth has been moderating only gradually."

Not every signal pointed the same way. Assistant Governor Christopher Kent observed on 19 October that "there are indicators where the labour market has become less tight a bit faster than we might have forecast." Mixed signals like these are part of the uncertainty the Board has to weigh.

A forecast revision of this scale changes the policy conversation. In August, the Bank expected headline inflation to be at 2.8% by June 2027. Now it expects 3.7%. The decision statement summed up the result: "Inflation is now forecast to remain elevated through much of 2027".

The Board also flagged a second-order concern: "there is an increasing risk that higher inflation expectations will become embedded." When forecasts are revised up repeatedly, households and firms may begin to doubt that inflation will return to target, which can make the Job harder.

The bottom line

The jump from 3.6% to 4.5% in the December 2026 headline inflation forecast is the most striking revision in the November SMP, but it is not the only one. Underlying inflation is higher for longer, unemployment is forecast to climb to 5.1% by December 2028, and growth beyond the next year is weaker. All of these are forecasts that rest on assumptions about energy prices and interest rates, and the RBA has stressed heightened uncertainty. The next data test is the monthly CPI on 25 November 2026, ahead of the 8 December decision. Readers wanting to understand the implications for their own finances can consider speaking with a licensed adviser or their lender.