Westpac Sticks With August, September Rate Hikes
Westpac is still calling for two cash rate rises, in August 2025 and September 2025, with no cuts until 2028. For borrowers and homeowners, that leaves little room for near-term relief and keeps repayments tied to a tighter policy path than most of the major banks expect.
Chief economist Luci Ellis said inflation should peak at 4.7% late this year, even though she now sees that peak as lower than she previously expected. She also said it would still run above what the RBA now expects, keeping the bank’s forecast more hawkish than the broader market view.
Ellis keeps 4.7% inflation peak
4.7% is the number Westpac is using to frame the inflation path, and Ellis said it would arrive late this year. She said that peak is below her earlier forecast, but still above the RBA’s current expectation, which leaves Westpac arguing that price pressures have not eased enough to shut the door on more tightening.
August 2025 and September 2025 are the two meeting dates Westpac is still pointing to for further action. That call matters because it keeps the cash-rate path moving up again this year, rather than settling into the pause now expected by some rivals.
ANZ, CBA and NAB split
Two cash-rate cuts in 2027 are now ANZ’s call after it changed course today. Commonwealth Bank kept its view that the RBA will stay on hold before cutting twice in mid-2027, while NAB expects a similar trajectory.
Late 2027 is HSBC’s timing for cuts, according to economist Paul Bloxham, who said: “Inflation is still too high and is set to rise further before it falls. That being said, the RBA has already taken significant action to deal with this surge in inflation – and, critically, the action is working … We expect the RBA to be on hold in June. Although there is some risk the RBA might choose to hike again beyond that, we expect the weakening in growth to convince them to be on hold.”
Markets price more tightening
12 months is the horizon over which financial markets were still betting that a hike was more likely than not. That sits closer to Westpac’s view than the more dovish bank forecasts, and it leaves households with a tighter funding outlook than the mid-2027 easing path now assumed by ANZ, Commonwealth Bank and NAB.
2028 is the point Westpac is using to mark the end of cuts, and that is the clearest signal for anyone planning a mortgage reset or budgeting around interest costs. If Westpac is right, the next move for borrowers is not relief but a longer wait, with the cash-rate path still biased higher before any turn lower.
