On 29 September every member of the Monetary Policy Board backed a rate rise; on 3 November three of the nine preferred to hold – and the record between the two meetings shows why the debate sharpened.

Five weeks separate the Reserve Bank's last two monetary policy decisions. Both delivered the same outcome, a 25 basis point increase in the cash rate target. Yet the votes behind them look very different. In September, the Board was unanimous in lifting the rate from 4.35% to 4.60%. On 3 November, six members voted to raise it to 4.85% and three voted to keep it at 4.60%.

The RBA has not said who voted which way, and the minority's reasoning has not been published. But the public record from the intervening weeks – data, forecasts and speeches – shows the arguments on both sides gaining force at the same time.

September: one view, two options

The September minutes set out a simple choice. The Board considered raising the cash rate by 25 basis points, which it adopted, or leaving it unchanged, which it considered and rejected.

The reasoning was clear: "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." Members "expressed their concern that excess Demand was greater than previously assessed."

The minutes also captured signs of strain. Unemployment was 4.6% in August. Australian equities had fallen about 5% since the previous meeting. Scheduled Mortgage payments were about 10% of household disposable income, around their 2024 peak, though fewer than 2% of owner-occupier borrowers had a Cash Flow shortfall. Market pricing at the time implied about 15 basis points more tightening by year-end.

The statement that month said the Board would do what was necessary, "including increasing the cash rate target further if needed."

The Inflation case got stronger

By November, the inflation numbers had moved further from target. On the RBA's inflation pages:

  • Monthly headline CPI was 4.3% in the year to September 2026, up from 4.0% in August and 3.5% in July.
  • The trimmed mean, the RBA's underlying measure, was 3.7% over the year to the September quarter, with a 1.0% rise in the quarter.

Headline and underlying inflation are distinct measures, but both sit well above the 2–3% target.

The forecasts shifted markedly. In the November Statement on Monetary Policy, headline inflation is forecast at 4.5% over the year to December 2026, compared with 3.6% in the August forecasts. The trimmed mean is forecast at 3.6%, compared with 3.3%. The RBA now expects inflation to reach the top of the target range only in late 2027, about three quarters later than previously forecast. These are forecasts, not certainties.

The SMP summed it up: "Inflation in Australia remains well above target and a number of upside risks have crystallised since the August Statement."

So did the case for caution

The other side of the ledger also grew heavier. The 3 November statement says: "The economy is slowing, housing prices have fallen significantly and the unemployment rate has risen." It adds that "the unemployment rate is projected to rise by more than expected in the August forecasts."

In the new forecasts, unemployment reaches 4.7% by December 2026 and 4.9% by December 2027, both above the August projections. GDP growth for the year to December 2027 is now forecast at 1.3%, down from 1.6%. The SMP judges financial conditions to be "restrictive".

The Financial Stability Review, released on 1 October, also found that "Most Australian households with mortgages remain well placed to manage more difficult conditions".

What officials said, and a new emphasis

The weeks between the meetings were busy for RBA speakers, and their remarks reflected both sides of the debate.

  • 19 October, Christopher Kent: "there are indicators where the labour market has become less tight a bit faster than we might have forecast." He also noted the cash rate and its expected path sat at the upper end of neutral estimates.
  • 21 October, Andrew Hauser: "The inflation outlook looks materially worse than we projected in the August report." He cited oil above $100 a barrel, about a third higher than the August assumption, and said: "We can't allow expectations to shift away from the target."
  • 25 October, Sarah Hunter: "We don't want to live with high inflation for a long time." On recession: "We don't see any signs of that yet in any of the data that we track."
  • 28 October, Michele Bullock: "Inflation will therefore likely be higher than was our base case in August." She also said "Housing prices have fallen in most Capital cities and new housing loans have declined."

None of these remarks reveals how individual Board members voted on 3 November. Read together, though, they show a sharper inflation outlook arriving alongside clearer signs of a cooling economy.

One phrase in the November statement has no direct counterpart in the September reasoning quoted above: "there is an increasing risk that higher inflation expectations will become embedded." The statement notes upside risks to inflation expectations and says some measures have risen lately.

Hauser had pointed to a rising share of firms seeing 3–3.5% inflation as the "new normal". For a majority of the Board, that risk appears to have been decisive. For three members, it was not enough to justify moving again at this meeting.

The bottom line

Between 29 September and 3 November, the inflation outlook worsened and the RBA flagged a growing risk to inflation expectations – but unemployment forecasts rose, growth forecasts fell and housing prices dropped. Unanimity gave way to a 6–3 split as those forces pulled harder in opposite directions. The next monthly CPI release on 25 November will feed into the 8 December decision. Readers wanting to understand how these shifts affect them can consider speaking with a licensed adviser or their lender.