Commonwealth Bank predicts end of rate cuts as inflation rises above RBA’s 2 to 3 per cent target range

Australia’s biggest home lender, the Commonwealth Bank, has declared the end of rate cuts after inflation surged above the Reserve Bank of Australia’s target range for the first time in more than a year.

The consumer price index rose 3.2 per cent in the September quarter, marking the worst annual headline inflation figure since the June quarter in 2024 and the biggest jump between quarters since 2022.

Inflation is now also above the RBA’s 2 to 3 per cent target for the first time since mid-2024, surprising economists at Westpac, the only big four bank that until today had been forecasting a rate cut next month on Melbourne Cup day.

Underlying inflation, which removes volatile price movements, grew by 3 per cent. Known as the trimmed mean, it is the RBA’s preferred measure of price press