SYDNEY, Dec 16 (Reuters) - Economists at the Commonwealth Bank of Australia now expect the Reserve Bank of Australia will hike interest rates in February next year as inflationary pressures pick up amid a capacity constrained economy.
“We see a rate hike as necessary to bring the economy back into balance and help return inflation back to its target,” said Belinda Allen, head of Australian economics at the CBA, in a note to clients on Tuesday.
“But we don’t expect a large hiking cycle, only fine tuning by the RBA and see the cash rate sitting at 3.85% at the end of 2026.”

Economists at the Commonwealth Bank of Australia expect the Reserve Bank of Australia to hike interest rates in February next year due to rising inflationary pressures. They foresee a necessary rate hike to balance the economy and return inflation to its target, with the cash rate expected to be 3.85% by the end of 2026.

Economists at Commonwealth Bank of Australia tip a February rate hike