ECB Officials Back October Hike as RBA Faces Split Bank Forecasts
Citi now expects the Reserve Bank of Australia to raise its cash rate twice in 2026, potentially beginning in February, taking it from 3.6% to 4.85% as inflation, household spending, labor-market conditions and housing costs remain strong. Other major Australian banks still expect rates to remain unchanged, underscoring uncertainty over the RBA’s policy path. Separately, European Central Bank officials reportedly favor further interest-rate increases, with an October hike possible, as energy-price increases linked to geopolitical conflicts keep inflation above target. ECB President Christine Lagarde emphasized that decisions will remain meeting by meeting and dependent on incoming inflation, wage and economic data, while markets are watching whether broader Governing Council support confirms the more hawkish signals.