Hike Six or Hold? The Evidence the Board Will Weigh by 8 December

Sonal Goyal

04 November 2026 05:13 PM AEDT

Hike Six or Hold? The Evidence the Board Will Weigh by 8 December

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Key Highlights

The Monetary Policy Board's next meeting is on 8 December 2026.
The case for another rise rests on underlying Inflation that remains broadly based.
The case for a hold rests on slowing growth, falling house prices and rising unemployment.
The next CPI release is due on 25 November, ahead of the decision.

The Monetary Policy Board's next meeting, the last of 2026, is on 8 December, with the decision due at 2.30 pm. By then the Board will have to decide whether to follow its fifth rise of the year with a sixth or leave the cash rate target at 4.85 per cent.

This article does not predict the outcome. It sets out the evidence the RBA has published, the questions that remain open, and the releases and appearances scheduled before the meeting.

On 3 November the Board raised the cash rate target by 25 basis points to 4.85 per cent. The vote was split: six members voted to raise and three to hold at 4.60 per cent. The statement did not give reasons for the minority view.

The majority's case was that "there is an increasing risk that higher inflation expectations will become embedded." and that "a further tightening in financial conditions is warranted to support the return of inflation to target." The Board did not say what it would do next, noting only that "the Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions."

The case the data could build for another rise

Some of the evidence in the RBA's own documents supports further tightening.

Underlying inflation picked up. Trimmed-mean (underlying) inflation rose 1.0 per cent in the September quarter, up from 0.8 per cent in the June quarter, and was 3.7 per cent year-ended.
Headline inflation is expected to rise further. Headline CPI inflation was 3.9 per cent year-ended in the September quarter. The RBA forecasts a peak of 4.5 per cent in the December quarter 2026. The monthly headline measure was 4.3 per cent in the year to September.
Wages are firming. The RBA revised its WPI forecasts higher, to 3.4 per cent over the year to December 2026. Liaison contacts report elevated wage expectations, pointing to little easing over the next year.
Energy is still a risk. "The Middle East conflict remains unresolved," the statement says. The December quarter 2026 oil assumption is 35 per cent higher than in August.
The risks lean upward. The RBA judges domestic inflation risks to be skewed to the upside. The market path in its forecasts implies about 35 basis points of further rises by mid-2027. That is market pricing as at 28 October, not an RBA promise.

The case the data could build for a hold

Other evidence in the same documents points towards caution.

The economy is slowing. The statement says so plainly, and household consumption is a key drag.
Housing is falling faster than expected. National prices were 4.7 per cent below their March peak in September.
Unemployment is rising. It was 4.7 per cent in September 2026, compared with the 4.4 per cent quarterly average the RBA had forecast in August for the September quarter. The RBA projects Unemployment of 5.1 per cent by end-2028.
Policy is already restrictive. The Board judges financial conditions restrictive, with bond yields at multi-year highs, though it is uncertain how restrictive.
Spending could weaken further. The SMP notes inflation could fall faster if higher rates and falling housing prices weigh on spending.
Commodity prices eased in October. The RBA's index of Commodity Prices fell 1.3 per cent in SDR terms in October (preliminary), though it was 12.5 per cent higher over the year.

What arrives before 8 December

Several scheduled releases and appearances will add to the evidence before the meeting:

4 November, 11.30 am AEDT: the RBA's Chart Pack.
5 November, 5.45 pm AEDT: Deputy Governor Andrew Hauser delivers the Sir Leslie Melville Lecture at the ANU in Canberra. The content is not known in advance.
9 November, 9.30 am AEDT: Assistant Governor (Economic) Sarah Hunter speaks at the UBS Australasia Conference in Sydney. Again, the content is not known in advance.
25 November: the next CPI release.

The CPI release is the main scheduled data point. Because the RBA's November forecasts have headline inflation peaking in the December quarter, the 25 November release will show how the figures compare with that forecast. As always, the headline and trimmed-mean measures, and the monthly and quarterly figures, should be read separately.

The Board will also have the minutes of the November meeting and any other data released in the meantime. How members weigh all of this is not something the published record can tell us.

The questions the Board has set itself

The statement and SMP indicate the questions that are likely to matter.

Are inflation expectations becoming embedded? This was the majority's stated concern. Any evidence on expectations, including what businesses tell the RBA's liaison team about wages and prices, bears directly on it.

How restrictive is policy? The RBA says the extent is uncertain. Signs that households and businesses are cutting back more sharply would suggest policy is tighter than assumed. That is the RBA's downside scenario, in which GDP is about 1.0 per cent lower by end-2028 and unemployment 0.3 percentage points higher.

How much spare capacity is there? The SMP says uncertainty about capacity cuts both ways. Pressures may be understated, or stronger labour Supply could push unemployment higher. The participation rate was 66.9 per cent in the September quarter, above the RBA's expectations.

Governor Michele Bullock told the Senate Economics Legislation Committee on 28 October that "continued weak productivity growth means that the economy cannot grow strongly without putting pressure on inflation." That remains part of the backdrop.

The bottom line

The case for a sixth rise rests on underlying inflation that is still broad, firm wages, high energy prices and upside inflation risks. The case for a hold rests on a slowing economy, rising unemployment, falling home prices and settings that are already restrictive. The Board has made no promise either way. The 25 November CPI release is the main scheduled data point before 8 December, and the Board has said it will be "attentive to the data" in making its decision.

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