Persistent inflation in Australia has prompted economists from major institutions like Goldman Sachs to Commonwealth Bank of Australia to forecast another rate hike as soon as next month, abandoning earlier expectations for rates to remain unchanged for the rest of the year.

This shift follows Wednesday's inflation report, which showed price pressures remain elevated, coming on the heels of the Reserve Bank of Australia's August meeting minutes that revealed a lower tolerance for consumer price increases among the rate-setting board members.

Commonwealth Bank of Australia, the nation's largest lender, stated on Thursday that the inflation data would cause the RBA to "lose patience." The bank now predicts a 25-basis-point rate hike in November to 4.6%, while also noting the possibility of a move at the September 28-29 meeting. Belinda Allen from the bank commented, "The Australian economy needs tighter monetary policy."

Economists at ANZ Bank and Goldman Sachs also anticipate an RBA rate increase in November, with Goldman Sachs similarly flagging a risk of a hike in September. Deutsche Bank's Phil Odonaghoe was the first to revise his earlier forecast following Wednesday's CPI release, going further to predict a rate hike at the September meeting, describing underlying inflation as "unacceptably high."

Sally Auld from National Australia Bank has also shifted to predicting a September hike, noting that "the risk of another increase in November is elevated, especially if economic activity data shows resilience in the coming months."

Australian bond prices have fallen for three consecutive sessions, influenced by the hawkish minutes and inflation data. The policy-sensitive three-year government bond yield rose 7 basis points to 4.67% in early trading, reaching a one-month high, as market expectations for a November hike strengthened. Traders have fully priced in a 25-basis-point increase at the November meeting, up from roughly a 48% probability earlier this week. They now see approximately a 50% chance of a move next month.

The RBA has raised rates at all three of its meetings this year, completely reversing the brief easing cycle implemented in 2025 and restoring the cash rate to 4.35%. This action is in response to a resurgence of inflation, which had already begun before the US-Iran conflict delivered an energy shock to the global economy, exacerbating price pressures.

Australia's economy has become more susceptible to inflation due to a decline in its potential growth rate, stemming from over a decade of weak productivity.

Other economists, however, maintain their expectations for rates to remain unchanged, including Westpac Banking Corp. In a report, the bank stated, "While a November hike remains a risk, we do not see it as our base case."

Paul Bloxham from HSBC Holdings also noted that further RBA tightening could pose risks. He pointed out that "it is important to note that the RBA still treats monthly CPI data as a partial indicator," adding that the central bank believes monthly figures won't be fully reliable for several more years. He also mentioned that "weak economic growth and falling house prices are expected to exert downward pressure on inflation over the forecast horizon."

The RBA's inflation target is the midpoint of its 2-3% range, a level it hasn't achieved in nearly five years. With no other official inflation data due before the September decision, traders and economists will be closely watching next week's second-quarter GDP and labor market figures for further clues.