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Financial markets now certain the RBA will hike interest rates in 2026

2 days ago
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Financial markets are now pricing in a 100% chance the Reserve Bank will hike rates in 2026, in what would be a blow to mortgage holders but may take some steam out of an overheating property market,The latest forecasts represent a turnaround from just two weeks ago, when traders were factoring in an even chance that the next RBA move would be a cut by its May meeting,It comes as data showed inflation is now moving in the wrong direction, alongside this week’s national accounts and household spending figures which showed the economy is accelerating into the new year,Adam Donaldson, the head of interest rates strategy at the Commonwealth Bank, said “the market has come to the conclusion that the Reserve bank won’t be cutting rates any further”,“Basically, from February onwards, the market is starting to price some risk that rates will go up.

”Data from the Australian Bureau of Statistics showed consumer price growth jumped to 3.8% in the year to October – far higher than expected, and well above the top end of the central bank’s 2-3% target range.The pain of higher mortgage costs would be a particular blow to the more than 85,000 first-home buyers this year who have enjoyed three rate cuts in 2025 but now face the prospect of higher repayments.Sally Tindall, the director of data insights at Canstar, said there was a dwindling number of banks offering loans at interest rates of below 5%, and that she expected fixed rates to climb higher from here as banks factored in the shifting expectations around the RBA’s cash rate.While outsmarting the banks was a hard task, Tindall said it was possible that fixing your mortgage at the lowest possible rate could work out for borrowers.

“If it suits your finances, right now, based on current forecasts, wouldn’t be the silliest time to fix – but the key is to shop around.”Sign up: AU Breaking News emailThree rate cuts this year have helped drive a rapid rise in home prices that has pushed affordability to its worst on record.As first-time buyers rushed to take advantage of the federal government’s expanded 5% deposit scheme, property investors have flooded into the market.Analysts at Westpac this week said they now expected property prices nationwide to rise by about 8% in 2025, and by as much as 14% in Brisbane and Perth.But the changed outlook for interest rates means that instead of accelerating to 9% next year, national home values should instead climb by 6% – only cold comfort to those struggling to get on the property ladder.

All eyes now turn to Tuesday, when the RBA will deliver its final rates decision for 2025 and before the January break.Analysts are confident the central bank’s board will hold the cash rate at 3.6%, but will be looking for any pushback against the financial market’s recent “hawkish” outlook.While traders have moved swiftly to switch from predicting rate cuts to hikes, most economists believe the RBA is more likely to hold through 2026.AMP’s chief economist, Shane Oliver, has “decided to give up on our view of another cut”.

But Oliver believes financial markets are overestimating the chance of higher rates.Unemployment is trending higher, he said, which means the jobs market is still “a little bit soft”.“There’s uncertainty around the reliability of the new monthly consumer price index, and consumer spending seems very dependent on getting discounts, which suggests a degree of fragility.”
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Cloudflare admits ‘we have let the Internet down again’ after outage hits major web services – as it happened

Technical problems at internet infrastructure provider Cloudflare today have taken a host of websites offline this morning.Cloudflare said shortly after 9am UK time that it “is investigating issues with Cloudflare Dashboard and related APIs [application programming interfaces – used when apps exchange data with each other].Cloudflare has also reported it has implemented a potential fix to the issue and is monitoring the results.But the outage has affected a number of websites and platforms, with reports of problems accessing LinkedIn, X, Canva – and even the DownDetector site used to monitor online service issues.Last month, an outage at Cloudflare made many websites inaccessible for about three hours

2 days ago
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BP to scrap paid rest breaks and most bank holiday bonuses for forecourt staff

BP is ditching paid rest breaks and most bank holiday bonuses for 5,400 workers in its petrol forecourts as it attempts to offset a planned rise in the independent living wage.The company has told workers in its 310 company-run forecourts that it will be changing their benefits in February. Workers at a further 850 BP-branded forecourts run by partners are on different pay deals.BP is an accredited member of the Living Wage Foundation’s fair pay scheme, under which employers commit to pay staff an annually set wage to meet living costs.Hourly pay for BP’s affected workers will rise to a minimum of £13

2 days ago
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Cloudflare apologises after latest outage takes down LinkedIn and Zoom

Cloudflare has apologised after an outage on Friday morning hit websites including LinkedIn, Zoom and Downdetector, the company’s second outage in less than a month.“Any outage of our systems is unacceptable, and we know we have let the internet down again,” it said in a blogpost, adding that it would release more information next week on how it aims to prevent these failures.The outage on Friday came after Cloudflare adjusted its firewall to protect customers from a widespread software vulnerability revealed earlier this week, and was not an attack, it said. Earlier, it said a separate issue had been reported with its application programming interfaces.The issue, which affected 28% of its traffic, lasted for half an hour and was resolved shortly after 9am GMT, it said

2 days ago
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‘Urgent clarity’ sought over racial bias in UK police facial recognition technology

The UK’s data protection watchdog has asked the Home Office for “urgent clarity” over racial bias in police facial recognition technology before considering its next steps.The Home Office has admitted that the technology was “more likely to incorrectly include some demographic groups in its search results”, after testing by the National Physical Laboratory (NPL) of its application within the police national database.The report revealed that the technology, which is intended to be used to catch serious offenders, is more likely to incorrectly match black and Asian people than their white counterparts.In a statement responding to the report, Emily Keaney, the deputy commissioner for the Information Commissioner’s Office, said the ICO had asked the Home Office “for urgent clarity on this matter” in order for the watchdog to “assess the situation and consider our next steps”.The next steps could include enforcement action, including issuing a legally binding order to stop using the technology or fines, as well as working with the Home Office and police to make improvements

2 days ago
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Lando Norris wins F1 world title in Abu Dhabi despite Verstappen’s GP win

Lando Norris has won his first Formula One world championship with a gutsy, nerveless drive of no little bravery to seal it with third place at the Abu Dhabi Grand Prix. A podium was enough for the 26-year-old British driver despite Red Bull’s Max Verstappen winning and his McLaren teammate Oscar Piastri taking second.Norris did exactly what was required of him in an enormously intense and high-pressure contest at the Yas Marina Circuit, including making a series of bold overtakes, with a flawless execution by himself and by his McLaren team.In taking his first world championship he becomes the 11th British driver to do so and it brings to an end McLaren’s drivers’ championship drought, which stretched back to 2008, when Lewis Hamilton last won it for the team. It had been 27 years since McLaren last secured the drivers’ and constructors’ double in 1998, with Mika Häkkinen

about 9 hours ago
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Ben Stokes says England have been ‘letting the pressure get to us’ in Ashes

Ben Stokes has admitted that the way England have folded in key moments during the first two Ashes Tests has led him to question the character of his players, and insisted: “A dressing room that I am captain of isn’t a place for weak men”.After Australia won the second Test in Brisbane by the same eight-wicket margin with which they secured the first, Stokes suggested the telling difference was that the home side had been superior in the “moments in the game where the heat is on and the pressure is really, really cooking” whereas his players “have all been guilty at moments [of] letting the pressure, the occasion, the circumstances, get to us”.“Over and over again, Australia have managed to get through those periods and outdo us,” Stokes said. “I know it’s not a skill thing, because they’re all incredibly talented players. But if you can’t put it down to skill then you start to wonder, what is it? Do we need to start thinking about what mentality we’re taking into those pressure moments?“Because when we’re on top we’re great, but when the game is neck and neck we’re not coming out on top on enough occasions to be able to challenge Australia

about 10 hours ago
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Forcing UK banks to support credit unions would help keep loan sharks at bay

about 12 hours ago
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Faith and Reform: is the religious right on the rise in UK politics?

about 14 hours ago
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From bricklayer to mayor: Steve Rotheram is quietly building a Liverpool success story

about 15 hours ago
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Farage dodges press as he unveils Reform’s first peer after Conservative defection

1 day ago
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Beware the Liz Truss chatshow: viewers will require survivor therapy

1 day ago
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Trans women to be barred from main Labour women’s conference in 2026

1 day ago