On Tuesday 3 November, while most of Melbourne is watching a horse race, the Reserve Bank board will be deciding whether to lift the cash rate for a fifth time this year. The last big piece of the puzzle, the September-quarter inflation data, landed this morning. It didn't resolve the argument — it sharpened it.
The RBA meets on Melbourne Cup Day, 3 November, with the cash rate at 4.60%. Today's data showed headline inflation at 4.3% annually (hotter than the 4.2% expected) and the RBA's preferred trimmed mean measure at 3.6% annually — above the RBA's own forecast, though in line with what the big banks had already priced in. The Big Four remain split: ANZ and Westpac still call a 0.25% rise to 4.85%; CBA and NAB still expect a hold at 4.60%, while flagging the risk has grown. Market odds of a hike were already above 60% before today's print and were not knocked back by it.
Why Is Melbourne Cup Day the RBA's Big Decision This Year?
The Reserve Bank board happens to meet on Melbourne Cup Day most years, but this year the timing has real bite. The cash rate sits at 4.60% after four rises in 2026, the most recent a 0.25% increase on 29 September. A fifth rise on 3 November would take it to 4.85%, the highest level since 2011, and would land on borrowers within one to two weeks as the major banks pass it through.
The decision and the quarterly Statement on Monetary Policy are handed down together at 2:30pm AEDT on 3 November. The last major data point before then, the September-quarter CPI, was released by the ABS at 11:30am AEDT this morning (28 October) — six days before the Board meets, and the figures are now in rather than pending.
Update: The September-Quarter CPI Is In — What It Showed
Headline inflation rose to 4.3% annually in September, up from 4.0% in August and hotter than the 4.2% economists had expected. The RBA's preferred measure, the trimmed mean, rose 1.0% for the quarter to 3.6% annually — above the RBA's own August forecast of 0.8%, though right in line with what CBA, NAB and ANZ had already pencilled in (Westpac had forecast a slightly softer 0.9%).
Housing was the largest contributor, up 5.2% annually (electricity +12.8% as Commonwealth bill rebates expire; new dwellings +4.7%). Transport was second, up 8.7%, as fuel surged 23.6% over the year. ABS head of price statistics Rachael McCririck: "Housing was the largest contributor to annual inflation in September, rising by 5.2 per cent."
The market's first reaction was telling: the ASX 200 initially rallied, then gave back some of that gain once the hotter headline landed, while the Australian dollar firmed to around 70.4 US cents. Odds of a November hike were already above 60% heading into the release — and nothing in today's data pulled them back down.
What Are the Big Four Banks Saying Now?
The CPI print didn't shift anyone's position, but it did harden it. ANZ and Westpac still call a hike to 4.85%; CBA and NAB still expect a hold at 4.60%, with both now describing the risk of a hike as higher than they would like.
| Bank | 3 Nov call | Reasoning, after today's CPI |
|---|---|---|
| ANZ | Hike to 4.85% | Economist Madeline Dunk says the 1.0% trimmed mean result "reinforces" ANZ's existing call for a follow-up hike. |
| Westpac | Hike to 4.85% | Says fuel "surged ahead of our expectations" and inflation momentum remains "meaningfully above the RBA's current expectations." |
| CBA | Hold at 4.60% | Senior economist Trent Saunders maintains a hold is the baseline, but says "risks are firmly tilted to the upside" now that the print is in. |
| NAB | Hold at 4.60% | Senior economist Taylor Nugent notes fuel "looks set to add to inflation again" in the December quarter, keeping the risk of a hike alive even in NAB's hold scenario. |
Bank positions as confirmed on and immediately after 28 October 2026, drawn from published bank commentary and media reporting. These remain the economists' own views, not RBA decisions, and can still shift before 3 November.
Beyond the big four, the split is just as visible. UBS still expects a 25-basis-point hike to 4.85%, pointing to the 1.0% quarterly trimmed mean as the trigger it was looking for. Betashares' David Bassanese argues the RBA "seems increasingly prepared to risk a recession to get inflation down," while economists at EY and KPMG have both flagged the risk of further tightening before year's end.
Why Did the Odds of a Hike Jump Before Today?
Two weeks ago, markets were pricing roughly a one-in-five chance of a November hike; by 26 October that had swung above 60%, among the sharpest repricings of this cycle. The trigger: speaking at a Citi investor conference on 21 October, RBA deputy governor Andrew Hauser said the inflation outlook "looks materially worse" than the Bank projected in August, warning that a growing share of businesses now see 3–3.5% inflation as "the new normal" — a scenario he called "the central banker's nightmare." Today's hotter-than-expected print has validated that repricing rather than reversed it.
What's Driving the Cost-of-Living Squeeze?
Whatever the board decides on 3 November, the cost-of-living pressure confirmed in today's data is already real for Melbourne households. Beyond fuel and housing, council rates and charges rose 5.6% annually and electricity is up 12.8% as Commonwealth bill rebates gradually expire — a cost increase with nothing to do with the RBA. None of that moves on 3 November regardless of the board's decision; it's the backdrop the rate call sits against, and it's a big part of why NAB's Taylor Nugent flagged that fuel "looks set to add to inflation again" in the December quarter.
Rising Unemployment Complicates the Call
The labour market has added a genuine complication to what looked, a month ago, like a cleaner case for a hike. Unemployment rose to 4.7% in September — a five-year high, and the highest since October 2021 — as the economy shed roughly 39,000 jobs, with the participation rate falling to 66.8% and underemployment edging up to 6.3%.
Economists read this two ways. IFM Investors' Alex Joiner notes unemployment is tracking well above the RBA's own forecast, which may force the Bank to revise its November forecasts upward regardless of what it does with the cash rate. At the same time, a softer labour market is one of the main reasons CBA and NAB lean toward a hold: raising rates into a weakening jobs market carries its own risk, even with inflation running hot. That tension — sticky inflation pulling one way, a cooling labour market pulling the other — is exactly why economists call this meeting "finely balanced."
What Would a Fifth Rate Rise Cost Melbourne Borrowers?
If the board does move on 3 November, the increase would reach most variable-rate borrowers within one to two weeks, in the same way the September rise was passed on from 9 October. Here's the illustrative impact of a 0.25% rise on a standard 30-year, principal-and-interest loan:
| Loan amount | Repayment before | Repayment after +0.25% | Increase per month |
|---|---|---|---|
| $500,000 | $3,243 | $3,326 | +$83 |
| $600,000 | $3,892 | $3,991 | +$99 |
| $750,000 | $4,864 | $4,988 | +$124 |
Illustrative only, based on a hypothetical 6.75% variable rate rising to 7.00% on an owner-occupier principal-and-interest loan over 30 years. These are not any lender's actual rates; your own rate, balance and loan term will differ.
What Should Melbourne Borrowers and Buyers Do Before 3 November?
- Variable-rate owner-occupiers: stress-test your budget against both outcomes now. A refinancing review can show whether switching lenders offsets some of the gap even if the board holds.
- Buyers with pre-approval: lenders buffer your borrowing power well above today's rate, so a hike can trim your limit before it's even passed on. Re-check it with our borrowing power calculator before you bid.
- Investors: review holding costs and structure via investment loans, factoring in the possible rate move alongside cost-of-living pressure on tenants.
- First home buyers: confirm your scheme eligibility and price caps on our first home buyer loans page before the decision changes your numbers.
- Everyone: use our calculators to see where you'd sit under either scenario, and talk to us before 3 November rather than after.
For the background to how we got here, see our explainer on the September RBA decision and our earlier look at the August CPI data that first put a November move on the table.
IFG's Take
A split board, a split set of bank economists, and a market that has more than tripled its hike odds in two weeks — that combination tells you the uncertainty itself has a cost. In my experience, which goes back to business banking at NAB in 2003, the borrowers who come out ahead in a meeting like this check their position before the headline, not after.
Whether the cash rate sits at 4.60% or 4.85% on the morning of 4 November, the rate you're paying today isn't necessarily the rate available to you. We compare a deliberately broad panel of lenders for clients across Melbourne's north and west, from Essendon and Moonee Ponds to Coburg North. Start at our Melbourne mortgage broker home page if you want your position checked before Melbourne Cup Day.
Frequently Asked Questions: RBA Melbourne Cup Day 2026
- When is the RBA's next interest rate decision?
- The Reserve Bank board meets on Tuesday 3 November 2026 — Melbourne Cup Day — with the cash rate currently at 4.60% after four rises in 2026. The decision and the quarterly Statement on Monetary Policy are both released at 2:30pm AEDT that day.
- Will the RBA raise interest rates on Melbourne Cup Day 2026?
- It's still genuinely split, even after the September-quarter CPI landed on 28 October. ANZ and Westpac maintain their call for a 0.25% rise to 4.85%, while CBA and NAB still expect a hold at 4.60%, despite acknowledging the risk has grown. Market-implied odds of a hike were already above 60% going into the data and were not knocked back by it.
- What did the September 2026 CPI data show?
- Headline inflation rose to 4.3% annually (up from 4.0%), hotter than the 4.2% economists expected. The RBA's preferred trimmed mean measure rose 1.0% for the quarter to 3.6% annually, above the RBA's own 0.8% forecast but in line with what the big banks had already priced in. Fuel, electricity and housing were the biggest drivers.
- How does rising unemployment affect the RBA's decision?
- Unemployment rose to 4.7% in September 2026, a five-year high, with 39,000 fewer people employed. A weaker labour market usually argues for holding rates, even as sticky inflation argues for a rise — which is exactly why economists are calling the November decision "finely balanced."
- How much would a fifth rate rise cost on my mortgage?
- As an illustration, a 0.25% rise adds roughly $83 a month on a $500,000 loan, $99 a month on $600,000, and $124 a month on $750,000, on a 30-year principal-and-interest loan. Your actual change depends on your own rate, balance and loan term.
Know Where You Stand Before Melbourne Cup Day
Integrated Finance Group is a boutique, director-led team of Melbourne mortgage brokers. Brian Hermosilla and Frank Marin bring 45+ years of combined experience, including business banking since 2003 (formerly NAB). We compare a deliberately broad panel of bank, non-bank and specialist lenders and can check your rate, repayments and borrowing power under either scenario before 3 November. Enquiries are answered the same business day — by a director. Call 0401 333 636.
Book Your Free Rate Review Compare refinancing options →This article is general information only and does not constitute financial, credit, tax or legal advice. It does not take into account your objectives, financial situation or needs; consider whether it is appropriate for you and seek personalised advice before acting. CPI figures cited here are from the Australian Bureau of Statistics' release of 28 October 2026. Bank forecasts, market-implied probabilities and economist commentary cited here are third-party estimates current as of 22–28 October 2026, are not RBA decisions, and may change ahead of the RBA's decision on 3 November 2026. Figures should be confirmed against primary sources (the RBA and ABS) before being relied upon. Repayment figures are illustrative only, based on the hypothetical assumptions stated; they are not any lender's rates or offers of credit. Integrated Finance Group’s brokers are Credit Representatives of BLSSA Pty Ltd, Australian Credit Licence 391237. All credit applications are subject to lender assessment and approval. Our Credit Guide is available on request. Tax questions should be directed to your accountant.