Oil pushes up the inflation threat as the Reserve Bank, with its cash rate at 4.60 per cent, weighs a fifth rise this year
The Reserve Bank raised the cash rate by 25 basis points to 4.60 per cent on 29 September, the highest since 2011, according to SBS and NewsBytes. The Sydney Morning Herald, The Age, Brisbane Times and WA Today say it may have to go higher if oil prices climb. The Adviser reports the RBA said a longer or more severe Middle East conflict could add pressure to global energy prices. West Texas Intermediate closed on Friday at US$99.02. ANZ and Westpac are reported to expect a rise to 4.85 per cent on 3 November, while CBA and NAB expect a hold. ABC News reported unemployment at 4.7 per cent for September.
Oil feeds into petrol, freight and airfares within weeks, so a price near US$100 can lift headline inflation even when underlying inflation is steady. A central bank cannot add supply, so it can only slow demand, and that is why oil shocks pose such a hard choice for a board already at 4.60 per cent.
If you have a variable mortgage, a quarter-point rise adds roughly $63 a month for every $300,000 owed. Check whether your fixed-rate term ends before November, because a hold or a rise will change what lenders offer.
Those expecting a rise, including ANZ and Westpac, point to the minutes showing the board would not wait on inflation and to oil back near US$100. They argue acting early is cheaper than a later, larger rise.
Those expecting a hold, including CBA and NAB, point to the steady rise in unemployment and to the risk, argued by Independent Australia, that higher rates deepen a downturn without lowering oil prices. They say the 28 October CPI should decide it.
Confirmed: the 4.60 per cent rate, the oil close and the split among the banks. Not confirmed: any decision for 3 November, which depends on the CPI on 28 October. Watch the quarterly trimmed mean figure and Brent and WTI prices next week.
DailyDrop Australia edition No. 15 · Morning · MON., OCT. 19, 2026