Bendigo Bank September 2026 Economic Update

Increasing oil and energy prices, higher household spending, interest rates rising overseas and booming global export levels all point to a Reserve Bank of Australia (RBA) interest rate hike by November, potentially as soon as late September, believes Bendigo Bank Chief Economist David Robertson.

“Despite the RBA’s efforts to slow our economy down and unemployment numbers in July increasing, Australian household spending remains high, up 7 per cent compared to this time last year,” he said.

"Combined with international factors, the case for an imminent domestic rate hike has grown substantially."

“With the Middle East conflict in its sixth month and a resolution looks as distant as ever, crude oil prices are back above US$100 a barrel. These rising costs will continue to feed into transport costs, logistics, and goods production," Mr Robertson explained.

“Until we see a meaningful and sustainable fall in energy prices, I believe we will see one interest rate rise before Christmas and remain sceptical of any RBA rate cuts in 2027 to ease the pain.

“Looking internationally, bond yields around the world have similarly moved higher reflecting this mood, with several central banks raising rates over the last few weeks, and we expect to see the US and Japan hiking rates this week as inflation remains problematic.

“The challenge for central banks and bond markets isn’t just being driven by the rebound in oil prices, but also as the global AI buildout phase drives demand for capital and labour, which partly explains why the global economy has been so resilient to higher energy prices,” Mr Robertson said.

The outlook for property prices remains subdued after recent tax changes and as interest rates nudge higher, this will flow through to lower Consumer and Business Sentiment.

However, Australia’s economy remains strong and despite rising unemployment figures in July, the jobs market remains resilient and strong business investment is helping to keep a soft landing in play.

in Australia, the Middle East conflict impacts have been offset by the boost from AI-related trade and investment, including in data centre fit outs and other drivers of machinery and equipment investment.

While the latest GDP data saw our growth rate decelerate from 2.5% to 2.1%, and the global economy is slowing from 3.5% to 3%, global goods exports continue to boom as the tech investment binge continues.

“We still expect a mildly higher Australian Dollar over coming months, with our AAA credit rating in sharp contrast to other major economies with problematic high government debt levels,” Mr Robertson said.