Economists are predicting Australian homeowners will be hit with an interest rate hike when the Reserve Bank meets on Melbourne Cup Day.

All the major banks are also expecting the RBA will raise the cash rate by 25 basis points to 4.35 per cent on Tuesday afternoon, delivering another blow to household budgets.

It comes off the back of higher-than-expected quarterly inflation and strong spending figures, with inflation still stubbornly above the RBA’s target.

Today’s meeting will be the second chaired by new RBA Governor Michele Bullock.

“Most economists are saying she will raise – I don’t know if they’re saying she should, but they certainly say she will,” Switzer Report founder Peter Switzer told Sky News Australia.

“So I think a lot of home loan repayment people will be suffering.

“Even if they get a win on the Cup, I think the realisation that their repayments are going up again will be really tough for them and tough for the economy as well.”


It would be the first hike in five months, with the board opting to keep rates steady at its past four meetings.

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