Inflation Hits 4.3%: Will the RBA Raise Rates Again on Melbourne Cup Day?

Melbourne Cup Day usually means sweepstakes, fascinators and a long lunch. This year, millions of Australian mortgage holders will also be watching Martin Place. Fresh figures show prices rising faster than expected, and the Reserve Bank meets on Tuesday 3 November with a real chance of lifting rates for a fifth time this year. Here we explain what the latest Australia inflation 4.3% reading tells us, what the RBA rate decision for November 2026 could mean for your household budget, and how to prepare whichever way the Board moves. This is general information, not financial advice.

The Numbers That Changed the Mood

The Australian Bureau of Statistics released its latest Consumer Price Index on 28 October. Annual headline inflation reached 4.3% in September, compared with 4.0% a month earlier, according to the ABS media release. Prices rose 0.8% in September alone.

The figure the Reserve Bank watches most closely is the trimmed mean, which strips out the biggest price jumps and falls to show the underlying trend. It rose 1.0% across the September quarter, faster than the 0.8% the RBA itself had forecast in August. On an annual basis, the quarterly trimmed mean now sits at 3.7%.

What pushed prices up

Fuel, electricity and the cost of building new homes did much of the damage. Housing and transport were the largest contributors to annual inflation over the quarter, which is why so many households feel the pinch at the bowser and when the power bill arrives.

Where the Cash Rate Sits Now

This year has already brought four increases to the cash rate. The most recent move, a 0.25 percentage point increase on 29 September, took it to 4.60%. Inflation is meant to sit between 2% and 3%, so today’s readings are well outside the comfort zone.

Deputy Governor Andrew Hauser added to the pressure on 21 October, saying prices were tracking well above what the Bank had pencilled in back in August. Markets took notice, and the odds of another increase rose sharply.

What the Banks Expect

Economists are not unanimous, but the balance has tipped toward a rise. The big four banks now broadly expect the cash rate to climb to 4.85% on 3 November, according to analysis cited by Admiral Markets.

There are reasons for caution too. The jobless rate climbed to 4.7% in September, and some economists argue the Board could pause to see how earlier increases are working through the economy. That is why the decision remains genuinely uncertain until the statement lands at 2:30 pm AEDT on the day.

What a Rate Rise Would Mean for You

If the RBA lifts the cash rate by 0.25 percentage points and lenders pass it on in full, variable home loan repayments would rise again. As a rough guide, the extra cost works out to around $16 a month for every $100,000 borrowed on a 30-year loan, though the exact figure depends on your rate, loan type and remaining term.

The effects reach beyond mortgages:

• Renters may see landlords pass on higher costs over time.
• Savers could earn slightly more on deposits if banks lift savings rates.
• Borrowers with credit cards or personal loans face more expensive debt.
• Businesses may delay hiring or investment.

Ways to Prepare Before Melbourne Cup Day

Whatever the outcome, a little planning helps:

• Check your loan’s buffer. Work out what your repayments would be at a higher rate, and whether your budget can absorb it.
• Ask your lender for a better deal. Many borrowers on older loans pay more than new customers. A quick call can sometimes cut your rate.
• Use an offset account if you have one, since every dollar sitting there reduces the interest you pay.
• Review subscriptions and bills. Small monthly savings add up when costs are rising.
• Speak to your bank early if you are worried about meeting repayments. Lenders have hardship options, and asking sooner gives you more choices.

Protecting your banking access matters too, especially with new AI tools appearing, as our guide to why you should never give your banking password to AI explains. Our [Link: how to refinance your home loan in Australia] guide covers switching lenders.

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