With a divided Board, a fresh CPI release due in late November and forecasts that have shifted sharply, the RBA's final decision of the year is no foregone conclusion.

Mark two dates on the calendar: 25 November and 8 December. The first brings the next monthly Consumer Price Index release. The second, at 2.30 pm, brings the Reserve Bank's final Monetary Policy decision of 2026. Between them, they will determine whether the year ends with a sixth rate rise or a pause.

That question is open because of what happened on 3 November. The Monetary Policy Board raised the cash rate target by 25 basis points to 4.85%, effective 4 November, but not unanimously. Six members voted to raise and three voted to hold at 4.60%. Five weeks earlier, in September, the Board had agreed unanimously on an increase from 4.35% to 4.60%.

A meeting is described as "live" when the outcome is genuinely uncertain. Several features of the current situation point that way.

The run-up to the December meeting is short, and the key steps are known:

  • 4 November: the new cash rate of 4.85% takes effect.
  • 25 November: the next monthly CPI update is released.
  • 8 December, 2.30 pm: the Board announces its decision.

Reason one: a Board that is not of one mind

A 6–3 split tells observers that a third of the Board preferred to wait. The RBA has not said who voted which way, and the statement does not lay out the reasoning of the minority. What can be said is that the balance of views has shifted between September and November, and could shift again.

In September, the minutes recorded that the Board considered two options, raising by 25 basis points or leaving the rate unchanged, and rejected the second. "The strongest argument for raising the cash rate target at this meeting was that several of the upside risks identified in August had since materialised or were building," the minutes said.

Since then, the case on both sides appears to have grown. Inflation forecasts have gone up, but so have Unemployment forecasts.

Reason two: the inflation data keep surprising

The November Statement on Monetary Policy opened bluntly: "Inflation in Australia remains well above target and a number of upside risks have crystallised since the August Statement."

The data track a rising profile. Monthly headline CPI was 3.5% over the year to July 2026, 4.0% to August and 4.3% to September. Trimmed-mean inflation, the RBA's preferred underlying measure, was 3.7% over the year to the September quarter and 1.0% in the quarter.

The November SMP forecasts headline inflation of 4.5% by December 2026, well above the 3.6% forecast in August. Trimmed mean is forecast at 3.6% for December 2026, compared with 3.3% in August. These are forecasts, and the RBA flags heightened uncertainty.

The 25 November CPI release will show whether monthly headline inflation is still climbing. It will be the main new inflation reading before the Board meets.

Reason three: the economy is cooling

The other side of the ledger is getting heavier. The statement said: "The economy is slowing, housing prices have fallen significantly and the unemployment rate has risen."

The SMP forecasts unemployment rising from 4.4% in June 2026 to 4.7% by December 2026, compared with 4.5% forecast in August. GDP growth is forecast at 1.6% over the year to December 2026.

RBA officials have offered slightly different readings of the labour market. Governor Michele Bullock told a Senate committee on 28 October that "the labour market seems a little tighter than we had previously judged." Assistant Governor Christopher Kent, on 19 October, said "there are indicators where the labour market has become less tight a bit faster than we might have forecast." Those comments are not necessarily in conflict, but they show the judgement is finely balanced.

On the question of recession, Assistant Governor Sarah Hunter said in an interview aired on 25 October: "We don't see any signs of that yet in any of the data that we track."

Reason four: market pricing still leans higher

The November SMP's cash rate assumptions, drawn from market pricing as at 28 October, put the year-average cash rate at 4.9% for 2026/27, before settling at 4.8% for 2027 and 2028. Those are market assumptions, not RBA commitments, and they were taken before today's decision. Still, they suggest markets at the time were not treating November as the definite end of the cycle.

Internationally, the RBA is not alone. Deputy Governor Andrew Hauser noted on 21 October that fourteen other G20 central banks have also raised rates. He also said: "The inflation outlook looks materially worse than we projected in the August report."

The Board has not offered forward guidance about December. Its statement said it "will continue to do what it considers necessary to bring inflation sustainably back to target" and that it "is conscious of the period in which inflation has been too high."

It also warned that "there is an increasing risk that higher inflation expectations will become embedded."

Hunter summed up the RBA's stance on pre-announcing moves: "I'm not going to front run what the Board might or might not do with interest rates."

The bottom line

The 8 December meeting is live because the Board is divided, inflation forecasts have risen sharply, and the economy is cooling at the same time. The 25 November CPI release will be the key new data point, with monthly headline inflation last recorded at 4.3% and trimmed mean at 3.7%. Market pricing in late October leaned towards rates averaging above today's level in 2026/27, but that is not a commitment. Anyone wondering what the outcome could mean for their own finances can consider speaking with a licensed adviser or their lender.