NAB now expects RBA to raise cash rate 25 basis points in November
TLT•NAB expects the Reserve Bank of Australia to raise its cash rate by 25 basis points to 4.85% in November, citing persistent, broad-based inflation.
1. Inflation drives forecast
NAB said its revised forecast reflects reassessed domestic capacity pressures and underlying inflation materially above the central bank’s August forecast. Third-quarter trimmed mean inflation was 1% quarter-on-quarter and 3.7% year-on-year, while 59% of the CPI basket rose above 3.5% on a three-month annualized basis. NAB expects a pause after November’s increase, though persistent inflation risks would leave the end of the tightening cycle uncertain.
