Inflation jumps to 4.3% and all four big banks now expect the RBA to lift the cash rate to 4.85% on Tuesday

The ABS reported on 28 October that consumer prices rose 4.3% in the year to September, up from 4.0% in August. All four big banks now expect the Reserve Bank to lift the cash rate by 0.25 points to 4.85% when it announces its decision on Tuesday 3 November, which would be a fifth rise this year.

This is the early November issue of The Weekly. Since our late October issue the CPI has landed, the banks have changed their calls and the auction market has weakened again. Everything below is as at 1 November 2026, and the RBA has not yet decided.

4.3%

The numbers that matter this week

What the CPI showed

The ABS release put annual inflation at 4.3%, with the CPI up 0.8% in September alone and 1.3% over the September quarter. Automotive fuel rose 9.4% in the month. Housing was the largest contributor to annual inflation, rising 5.2% over the year.

The underlying measure matters more to the Board. Trimmed mean inflation was 3.6% over the year to September, up from 3.5% in August, which the ABS revised down from 3.6% after a change in seasonal factors. Over the September quarter the trimmed mean rose 1.0% on the pre-October 2025 basis, which Westpac calculates as 3.7% a year. That is the 1.0% figure we flagged last issue as the one that would fit the Deputy Governor's warning.

For landlords, the housing detail is the part to read. The ABS says the biggest drivers within housing were new dwelling prices, electricity and rents. Electricity rose 12.8% over the year, mainly because Commonwealth electricity rebates ended. Rates and charges rose 5.6%. If you pay the water, rates or insurance bills on a rental, those costs are rising faster than the rent index is.

The banks have changed their minds

CBA had expected a hold. After the CPI, all four major banks expect a rise to 4.85%. CBA's head of economics said the quarterly CPI "affirmed our view that a rate hike is on the cards next week", and NAB pointed to the breadth of inflation, with nearly 60% of the CPI basket running at an annualised pace of 3.5% or more.

Economists are less united on what comes next. CBA, NAB and Westpac expect no further rise in December, and Westpac sees the next risk as February. KPMG's Brendan Rynne called the CPI "the last data point necessary for the RBA to increase the cash rate for a fifth time this year", according to the ABC, which reported market pricing for a rise at about 85% after the release.

The Board meets on Monday and announces its decision on Tuesday 3 November, the second day of the 2 to 3 November meeting. It will publish updated forecasts alongside the decision. The final meeting of the year is 7 to 8 December.

None of this is certain. The case against a rise is the one Deputy Governor Andrew Hauser described as "hard choices" in his 21 October remarks: doing more on inflation at a cost to jobs. Unemployment was 4.7% in September.

What a fifth rise would cost

We use the same example as our other monthly issues: a $600,000 investor loan, which is 80% of a $750,000 property. At Cotality's national gross yield of 3.85%, the property earns about $555 a week, or $2,406 a month, before expenses.

A rise adds $125 a month to the interest-only bill, or $1,500 a year, and about $100 a month on principal and interest. These are illustrations only. Your own position depends on your rate, loan structure, offset balance, tax rate and actual rent. Lenders decide for themselves whether and when to pass a rise on.

Rents: the two measures still disagree

The CPI says rents rose 3.6% over the year to September, unchanged since May. Rents rose 0.2% in September, and the ABS says they would have risen 0.3% without the Commonwealth Rent Assistance indexation on 20 September.

SQM's weekly index tells a hotter story. In the week ending 28 October, national house asking rents were $794 a week, up 1.3% over the rolling month and 7.6% on a year earlier. Unit asking rents were $612, up 0.2% over the month and 6.8% over the year. Combined asking rents were $709.83, up 7.3% on a year earlier.

The two are not in conflict. We explain why in a separate piece on the gap. SQM's October vacancy rates are due in mid-November, and will show whether the softness in unit rents that we reported in our October rental market issue has continued.

Auctions: still under 45%

Cotality's final figures put the combined capital city clearance rate at 43.6% in the week ending 25 October, down from 47.6% the week before and 66.7% a year earlier. There were 1,871 auctions, up on the previous week but 42.2% below the 3,236 held in the same week of 2025.

Every capital that held auctions had a lower clearance rate than a year earlier. Cotality noted that Melbourne vendors appear to have brought auctions forward ahead of Melbourne Cup Day, which explains the jump in volume there. Our earlier article on spring auctions covers what a weak spring means for anyone thinking of selling.

Dates to watch

• Monday 2 November: self-lodged tax returns for 2025-26 are due, because 31 October fell on a Saturday. Cotality's home value index for October and ABS building approvals for September are also due.
• Tuesday 3 November: RBA decision and updated forecasts, at the end of the 2 to 3 November meeting.
• Wednesday 11 November: ABS lending indicators for the September quarter, the first full quarter after the May Budget.
• Mid-November: SQM vacancy rates for October.
• Thursday 19 November: ABS Wage Price Index.
• Tuesday 24 November: ABS Labour Force for October.
• 7 to 8 December: the last RBA meeting of 2026.

What this means for landlords

1. Treat 7.0% as the working number. If lenders pass on a rise in full, the average investor variable rate moves to around 7.0%. Work out your monthly shortfall at that rate today, and speak to your lender or broker before the decision if it breaks your buffer.
2. Check your fixed rate expiry dates. If a fixed period ends in the next six months, ask what the revert rate will be and compare it with variable and fixed offers.
3. Do not read asking rents as a mandate. Asking rents are up 7.3%, but your tenant's rent is judged against what similar properties are actually letting for. Check recent lettings near you before setting a renewal figure, and remember the RBA's own estimate that 15% of renters are in negative cash flow.
4. Review the costs the CPI is showing you. Rates, insurance and electricity are rising faster than rents. Look at what you actually pay and whether insurance and utilities contracts have been compared recently.
5. Keep a buffer for arrears. Talk early if a tenant falls behind and follow the process your state regulator sets out.
6. If you are buying, run the numbers at 7.0%. Auction results and longer selling times give buyers room to negotiate. The property still has to work at today's rates.
7. Lodge your tax return or confirm your agent has. Self-lodgers have until Monday 2 November.