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Borrowers could be facing a 17-year cash rate high in less than a week.
A hotter than expected inflation reading for September has pushed the chance of a Melbourne Cup day rate rise to 90 per cent.
Annual inflation rose in September from four percent to 4.3 per cent
The measure the RBA watches closely that strips out the most volatile prices items in the basket, underlying inflation, rose to 3.6 per cent.
Housing was among the biggest contributors to inflation, up over five per cent, driven by the cost of new builds and higher electricity prices.
And transport costs rose more than eight percent, as fuel prices surged more than nine percent due to conflict in the Middle East.
Treasurer Jim Chalmers says the price pressures have been turbocharged by the US war with Iran.
The Reserve Bank is increasingly worried that businesses will keep passing on higher costs to their customers, further fuelling inflation.
It raises the chances the central bank may need to hike interest rates beyond November in order to bring inflation back down to its target range of betwen two and three per cent.
Independent economist Alan Oster says if that happens, the risk of a recession rises.
"My worst case scenario would be two or three further rate rises which I think would clearly cause you a recession," he says.
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Read more here: https://www.abc.net.au/news/2026-10-28/inflation-september-cpi-ahead-of-november-interest-rate-call/107317382
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