RBA to hike by another half-point in September, slower pace of tightening ahead – Reuters poll

Twenty-seven of 29 economists in the Aug. 26 - Sept. 1 Reuters poll forecast the RBA would hike the cash rate by 50 basis points at its Sept. 6 meeting, taking rates to 2.35%, more than three times higher than before the COVID-19 pandemic.

All four major local banks - ANZ, Westpac, CBA and NAB - were among those expecting a 50 basis point hike on Tuesday. The remaining two expected a 40 basis point move.

Most respondents who answered an additional question predicted the central bank would revert to 25 basis point increments at the October and November meetings.

Economists have brought forward their rate hike expectations for the eighth Reuters poll in a row, with just over half, or 15 of 29, now expecting the cash rate to reach 3.10% or higher by the end of this year, broadly in line with market pricing.

The remaining 14 respondents forecast rates to end 2022 at 3.00% or lower. According to the median forecast, rates were then expected to remain at 3.10% until the end of next year.

More than one-third of respondents, 10 of 29, predicted rates would reach 3.35% or higher by the end of March.